Dubai is suffering from a shortage of ultra-high-net real estate supply, according to a leading industry expert.
Founder and managing director of Driven Properties, Abdullah Alajaji, was speaking following the sale of arguably the most expensive penthouse apartment in the emirate, at One Palm on the trunk of Dubai’s Palm Jumeirah – a sale of AED85 million for the shell-and-core property to a European buyer.
Alajaji told Arabian Business: “The challenge right now is quality, ultra-high net supply because that is virtually non-existent. In the apartment space, with the penthouses, you have three or four projects that can offer that product, but in the villa segment it’s almost non-existent.”
As a means of addressing the shortfall, Alajaji launched his own development company, Lamar Development, in May 2019. They will soon launch the a luxurious project, which is set to become a haven for ultra-high-net-worth individuals. Nestled on a private island with impressive views of the sea and Dubai’s skyline, Sea Mirror consists of 18 villas that offer luxury island living, starting from $20 million.
He said: “We see the demand, but the supply just isn’t there for that category. We want to cater for that category now.”
Dubai’s real estate sector has been suffering as a result of a property glut and faltering demand, which has seen prices fall by more than a third since the market peaked some seven years ago.
And while the decline, in general, has been exacerbated by the coronavirus pandemic, Alajaji revealed Driven Properties, which was founded almost ten years ago in 2012, has experienced huge demand.
Abdullah Alajaji, founder and managing director of Driven Properties.
“What we call the ultra-high-end segment of the market has done extremely well over the past six months. Specifically, I would break it down from November all the way to now has been flooded with activity, to the point that our volume of high ticket transactions has quadrupled from the beginning of 2020 to the six-month period we’re in now,” he said.
“We’ve had a 400 percent increase in the value and the volume of transactions in that bracket, which is the AED25m-plus.”
He said on the luxurious Jumeirah Bay Island project the company has concluded over AED1 billion in sales, mainly in the last six months.
“Many had never experienced Dubai, but they came here and said that buying a penthouse or a nice villa for $10m was a no-brainer in this place and they made that decision. And we’re talking about the who’s who of the globe, from Europe predominantly,” he said.
That is certainly true of the latest big-ticket sale added to the company’s portfolio at One Palm.
Kianoush Darban, the agent behind the sale, and one of the associate partners in the company.
Kianoush Darban, the agent behind the sale, and one of the associate partners in the company, told Arabian Business that the purchaser also bought the luxury 8,000 square metre apartment directly below the penthouse (21,000sqm), for AED43m – without even visiting the property.
Taking up the story, he said: “He said he couldn’t come to Dubai but asked if there was any chance I could take some photos and videos and send them to him via WhatsApp. I did videos and everything and I sent it over. They were asking questions. At the time they were in Hong Kong and then they went to Australia. I was talking to them and messaging over WhatsApp so they never saw it personally.
“He was happy to deal with me so we secured the deposit and ten days later the deal was closed. Everything happened online. They didn’t come to Dubai until we finished the process.”
And when they did come to see their new property, Darban was in for an added surprise. He added: “When he and his wife came to see the penthouse, I went with them and they loved it. He had lots of plans for the property and said he wanted to make some changes. I told him I had one upstairs that was available. We went upstairs, exactly above the one I just sold them, he saw it and fell in love with it. The price was almost double, but I could see in his eyes this was the one he wanted.”
Jumeirah Bay Island project.
And he said the deal was closed within one week.
He said: “Dubai has now become one of the safest cities and the UAE is one of the safest countries. We see a lot of instances where clients come here because there is a lockdown in their country, they were going to invest in Europe, but now they think Dubai is the safest in terms of security and the pandemic.
“I think with coronavirus people thought the market in Dubai was going to go down, but since September I felt like the whole world moved to Dubai. With these people it’s not a matter of price, it’s a matter of availability of quality.”
Follow us on
