Dubai’s real estate market will return to normal by the end of 2015 after a subdued past six months, the founder and chairman of developer Sohba Group has predicted.
In an interview with Arabian Business, PNC Menon said the developer had based prices for its new Mohammed Bin Rashid Al Maktoum City – District One project – a joint venture with Meydan racecourse – on the current flat market conditions.
Research by Knight Frank this month found that luxury property prices in Dubai dropped 1.9 percent between September and March as the market remains cool.
Luxury and ‘super-luxury’ villas in the first and second phases of Meydan Sobha’s development, unveiled for the first time on Thursday, are priced at between AED2,500 per square foot and AED2,700 per square foot based on the subdued conditions.
Menon noted that these prices were “reasonable – they are not top of the market figures”. But he added that prices may go up for the third and fourth phase of the scheme, details of which are expected to be announced at the end of the year.
“Prices are driven by market dynamics not by the developer, and the developer designs around that,” he said.
“However, my view is that by the end of the year the market will be back to normal. I think we will announce phases three and four by then.”
For Menon, Dubai’s prime location will continue to be the area stretching three to four kilometres from the Burj Khalifa and Dubai Downtown. Here, even in low market conditions, developers can set robust prices provided design and construction quality is high, he told Arabian Business.
“Location is really critical in the real estate business – even if the market is bad, if the building is in the right place it can reap good prices.”
Menon declined to reveal details of an as yet unannounced new element – thought to be in the leisure and entertainment sector – to the District One project, to which the developer referred during a press tour of the villas on Thursday.
“I cannot say but it is something truly fantastic, Insha’Allah – not related to either the hotel or retail components – and will add tremendous value to the project,” he said.
Meanwhile, construction has begun on Sobha Group’s $4 billion Sobha Hartland scheme, situated in Dubai Downtown close to District One. But Menon said the developer is not planning any new villa schemes at present – “we are very busy with these two”.
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