By Elizabeth Broomhall
BR Shetty, the CEO of NMC Group, paid near $13m for two floors of world’s tallest tower
The CEO of NMC Group, the UAE-based healthcare provider, said he has no plans to sell his Burj Khalifa apartments while Dubai’s real estate market remains uncertain.
Multimillionaire entrepreneur BR Shetty paid AED45m ($12.7) for two floors of the world’s tallest tower, including the 100th floor, but said he mainly uses the space to host parties.
“I don’t live [there], I have some parties; that’s how we use it now,” he told Arabian Business on the sidelines of the 5th Arabian Business Forum.
“My office is on the 41 floor. I have a house on the Palm [Jumeirah] and in Abu Dhabi.”
Karnataka-born Shetty said it was his “passion” to take part in all Dubai’s most important initiatives, and invest in projects which would improve the economy of the emirate.
“What better address than ‘BR Shetty, 100, Burj Khalifa, Dubai’,” he said last year, when announcing the deal to buy the apartments.
Unveiled at the height of Dubai’s property boom, the world’s tallest tower was inaugurated in January 2010 with a glittering water and fireworks display. Developer Emaar sold 90 percent of the tower’s 900 apartments ahead of its launch.
The 828m-tall Burj Khalifa also includes 144 Armani-branded residences, 37 floors of office space and the 160-room Armani Hotel.
But the luxury tower saw rental prices slump in the wake of a global financial crisis that saw house prices in Dubai more than halve in a matter of months.
Nine months after its launch, the cost of renting a studio flat had plunged 40 percent to AED6,666 ($1,815), while one-bedroom apartments were on offer at AED10,000. An estimated 825 of the tower’s 900 apartments were vacant.
Room rates had also slumped at the Burj Khalifa’s Armani-branded hotel, trading 40 percent down from the published rates at the property’s launch.
Guests rooms were available for AED2,400 ($653) a night, compared to a rate card price of AED4,000 at the end of April.
The cost of a two bedroom suite, originally priced at AED40,000, had declined to AED24,000, according to the hotel’s reservations desk.
Shetty, who said last year the value of his Burj Khalifa assets had increased dramatically from his date of purchase, admitted this week that he could lose money if he sold the property now.
“[I would sell] if the price was good, but now is not the time to sell. If I give it up for rent it will be spoilt,” he said.
The title for the article should rather be " Tycoon has no plans to sell Party Pad at a loss" . The article mentions that the tycoon would sell if the price was good. Come on Arabian Business. Enough of Spin..some proper reporting pls !
Any idea whats the maintenance per year that Mr.Shetty pays for the 100th floor on Burj Khalifa?
I thought that the average loss on property has finally been accepted by the industry as 70% down on the 2008 peak, let us say that Downtown and the Burj Khalifa have more appeal therefore the percentage drop is 55% from 2008 values.
That reduces the original $12.7 million price tag, assuming that is the 2008 price, the the owner is currently facing a loss of $7 million, best case and probably until 2018/20.
However, that kind of loss maybe worth it both for the address and a party plan or three. Nevertheless, it will never have the magic of an address in the wealthy streets of Dublin, London, Monaco or Paris will it now?
It's an investment which must be very difficult to service with mortgage and maintenance costs taking a very heavy toll.
A case of a "Party in the Clouds" gone very bad!!
He can afford it guys; don't waste your time in calculating the loss.
mr shetty is a formidable indian businessman in the UAE who has not only developed a successful business but also in his small way, has added to the business landscape of the uae.
the problems he faced recently are typical of the problems faced by expat businessmen for doing business in the uae. ultimately the partner has ultimate say in everything.