Interview: Nakheel discusses the changing face of Dubai property

Interview: Nakheel discusses the changing face of Dubai property

by Eleanor Dubai

Dubai has long been associated with luxury developments and extravagant architecture, but the emirate’s property market continues to grow and mature – and it’s a change that is welcomed by developer Nakheel.

The company behind the iconic Palm Jumeirah was in London at The Dubai Property Show this month. In an exclusive interview with TheMoveChannel.com, Chief Commercial Officer Aqil Kazim discussed the changing face of the Dubai real estate.

Here are seven insights from inside Dubai’s property market:

1. Speculators are being replaced by end users

“We’re seeing a shift from speculator market to a more end user market, which is what Dubai was looking to do anyway. It’s very healthy. Today, we sell to end users more than speculators and this is what we’re all about. Reasons to invest are perhaps rental yield, perhaps the lifestyle of Dubai, perhaps you have family and friends there, perhaps you want a second home.”

“The situation in Dubai was… the speed at which capital appreciation was happening was just too fast and a lot of people wanted to jump on that opportunity, which is not wrong, but it’s not something that we encourage. We would like some speculation, but not the entire thing based on speculation.”

2. Cooling prices are not a concern

Dubai’s prices cooled last year, but the mood is positive in the real estate industry.

“I call that a correction more than anything else. There are a few factors causing that – overall, there’s a global effect. Interestingly, rentals haven’t dropped as fast as prices have dropped, so the yields are actually increasing – again, it’s becoming more and more attractive for people who are looking into buying and investing and leasing or even choosing it as a home because they’re getting better prices. As far as Nakheel is concerned, we have projects in both high end categories as well as investment categories, so we have a variety of options.”

3. Brits: Nakheel’s third largest group of investors outside the Middle East

British investment in Dubai has been there for many years, says Kazim.

“The relationship between the two cities of London and Dubai has been a close relationship. There are a lot of similarities. Both are central hubs for trade, finance. The reasons to select Dubai are the sunshine throughout the year, the cultural scene is very compatible for what British investors look for – we have more than 170 nationalities in Dubai. A simple example I keep giving is the education sector: we have a lot of boutique syllabuses. If I were from Japan and I wanted my son to go to a Japanese school, that option is available. Korean schools. The number of British curriculum A Levels, GCSEs, all of them are available.”

4. The Expo 2020 boost is starting now

Dubai is hosting the World Expo in 2020, something that is widely expected to give a boost to Dubai’s property market.

“I think now’s the time for it to start,” comments Kazim. “We’re in 2016, the event’s in 2020, and it’s a large scale project. We sell plots of land to third party developers. Those developers who bought land from us in the past have started to construct projects, purely because they’ve seen demand rising out of projects like Expo.”

5. Tourism: There’s a clear demand for 3-star hotels

Dubai is associated with high-end homes and luxury hotels, but there is growing demand for 3-star hotels in the emirate.

“As far as hospitality is concerned, there’s a clear demand for 3-star hotels. Not to say that 5-star is not in demand, but Dubai’s target is to achieve 20 million annual visitors and tourists by the year 2020. We’re still quite far off – we’re at 14.5 million right now – so the number of rooms has got to increase.”

6. Oversupply is not an issue

Despite some media reports, Nakheel is not concerned about the possibility of oversupply in the market.

“We deliver projects on a feasibility basis and it has got to be able to fulfil some kind of demand for us to launch it. There are reports out there talking about oversupply. I don’t know, I’m probably an optimist, but you’re looking at a city that has ambitious growth plans in term of resident population. Even if that growth was half achieved, we would be in short supply, not oversupply. We wouldn’t be building projects if it wouldn’t be fulfilling a certain demand.”

7. On the growing number of tall buildings around the world…

“Competition is always good! Dubai is not a very old city – it’s been around for 50 years or so,” he adds. “We want to be competitive. And a lot of these [landmarks] are value propositions – having the tallest tower attracts tourists, having the biggest mall attracts a certain type of clientele. You will notice that the architecture of Dubai focuses a little bit on the vanity side, you’re quite right. It’s important to attract tourists on a repetitive basis – as a tourist, I want to be able to see something new every year.”

Read the full interview at TheMoveChannel.com.

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Notes to Editors

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Dubai: Still the Next Big Thing?

by Kate Dubai

 

When Dubai is mentioned, images of high-rise buildings, high-success industry, new-found celebrity culture, ‘Media City’, and profit from excellent rental returns spring to mind. Dubai has become the best known of the United Arab Emirates (UAE) and has achieved international acclaim for its real estate development, putting it firmly on the map. The second largest Emirate after Abu Dhabi, Dubai was well-situated geographically – between Europe and Asia – for business and property development, and the mere 7-8 hour flying time from the UK as well as having no capital gains or income tax, only enhanced its appeal.
 
This initial development of this once primarily Arab Emirate, now home to a fast-growing population of which 80% is from overseas, resulted in a shortage of rental properties and therefore a large number of people reaping large profits from the real estate market. Now, however, there are signs that this most well-known Emirate is moving into a new era, as is documented in Real Estate TV’s ‘Next Big Thing Dubai’ programme showing on 11th May on Sky channels 273 and 274 and on demand on Virgin TV and at www.realestatetv.tv.
 
The programme allows viewers to discover why Dubai can still be seen as the ‘Next Big Thing’, even following its huge development of recent years and will allow an insight into the future for this powerful Emirate. ‘Next Big Thing Dubai’ considers the effect of new transportation links that are under development, such as the new metro system due for completion in 2012 as well as new roads being developed, and also the effect of the new industry that has moved in, making the Dubai economy now around 94% non-oil related.
 
Dubai’s plans remain ambitious, and in looking towards the future, impressive developments are in planning or already taking place, in the ever-prevalent drive to attract tourism. Alongside this, recent legal changes have made it easier for foreign property investors, giving them greater protection in an uncertain world. Dubai’s constant evolution has kept it ahead of the game in terms of growth and development and it is this that could see it head towards an even brighter future. As Jo Sinnott, presenter of ‘Next Big Thing Dubai’ concludes ‘Dubai is growing even faster than before and for property investors, could once again be the ‘Next Big Thing’.
 
Tune in Sunday 11th May at 10pm to Real Estate TV on Sky Channels 273 and 274 and on demand on Virgin TV and at www.realestatetv.tv to watch ‘The Next Big Thing Dubai’.
 

Emerging Emirates: Tune in to Ras Al Khaimah and Ajman

by Kate Dubai

Often blinded by the leading light of Dubai and more and more overshadowed by the growing property market of Abu Dhabi, Ras Al Khaimah and Ajman can sometimes be thought of as the forgotten Emirates of the UAE. Things are, however, changing. Ras Al Khaimah (RAK) – the northern-most Emirate and one traditionally known for mining and industry – and Ajman – the smallest Emirate known for fishing and its port – are following in the footsteps of Dubai’s success and growing their economies in a new direction. In both of these United Arab Emirates, property is becoming the new arena of expansion and one that is proving big business for many.

This Sunday 4th May 2008 is set to see an insight into these interesting Emirates and their growing property markets with the ‘Next Big Thing Ras Al Khaimah and Ajman’ programme showing on Real Estate TV, the UK’s leading dedicated property channel, available on Sky channels 273 and 274 and on demand on Virgin TV and at www.realestatetv.tv. ‘Next Big Thing Ras Al Khaimah and Ajman’, is part of the Next Big Thing series showing Sunday nights on the channel, a series designed to shed light on the areas that are up-and-coming and on target to show good property investment returns in coming years.
 
Through the programme, viewers are given the chance to find out more about these lesser-known Emirates: their location, history, infrastructure development and plans for the future. Interest in both of these countries has dramatically increased in recent times and this positive growth is set to continue. Currently, however, excellent property bargains are to be found, with RAK, for example, boasting property prices that are averaging 50% lower than in neighbouring Dubai.
 
The comparisons with Dubai are interesting and something that is considered in the ‘Next Big Thing’ programme. Both of these Emirates are looking to Dubai’s terrific success and learning from it, and also seeing how to do things differently so as to avoid making the mistakes that may have been previously made by this powerful neighbour. Comparisons are clear, RAK is building Al Marjan, a man-made island off the coast, drawing comparisons with Dubai’s Palm, and Ajman is building ambitious tower blocks that are changing the skyline. As the programme reveals, however, there is more to these Emirates, with interesting desert and mountain developments also taking place that set them apart and make them interesting markets to find out more about.
 
Tune in Sunday 4th May at 10pm to Real Estate TV to watch ‘The Next Big Thing Ras Al Khaimah and Ajman’ and the following week to find out more about the booming market of Dubai.