#PROJECT-Ras Al Khaimah: LA HOYA BAY RESIDENCE (Al Marjan Island)

[Monument]

Originally Posted by martinfields

i was just opening a debate regarding prospects on the island. importantly about any investment is timing and i understand LHB is due for completion earlier than others. Personally the longer completion date the better for investors as this provides a longer period of time for which the island to develop and for prices to rise. developments a year ago were 900 Dirham a sq ft and several are now nearing 1300 per sq ft. Therefore investors have locked in 40% increases with little investment. lHB is one of the early developments so should experience good returns but the without direct beach access or being sheltered to some extent will reduce its true potential. blu mirage looks a little soulless. I am interested to explore other projects and viewpoints. I am not working for anyone but i have pointed out have 6 properties reserved spread across 2 developments and looking to add more to the portfolio for the right development. i have not to date invested in lhb but interested to consider viewpoints. The main reason for not investing in such a development is that i look for long development times so that price rises can be maximised as generally i sell before completion or shortly after completion.

You say you have two invested in 2 other developments - which are they?

I agree with you about the potential of Al Marjan - it was visiting the site of LHB that sold me - beautifully serene, with the mountains in the background and a couple of degrees cooler than the mainland - and completely unknown by the wider world. But Al marjan does not, at present, have the economic rational of Dubai or Abu Dhabi that can really drive interest. I would hate to commute to Dubai from there and haven't a clue what I'd do to earn a living in RAK - as it has so little economic base. This the downside - as RAK remains a "marginal place" - presently.

[Yousuf27]

Originally Posted by martinfields

i was just opening a debate regarding prospects on the island. importantly about any investment is timing and i understand LHB is due for completion earlier than others. Personally the longer completion date the better for investors as this provides a longer period of time for which the island to develop and for prices to rise. developments a year ago were 900 Dirham a sq ft and several are now nearing 1300 per sq ft. Therefore investors have locked in 40% increases with little investment. lHB is one of the early developments so should experience good returns but the without direct beach access or being sheltered to some extent will reduce its true potential. blu mirage looks a little soulless. I am interested to explore other projects and viewpoints. I am not working for anyone but i have pointed out have 6 properties reserved spread across 2 developments and looking to add more to the portfolio for the right development. i have not to date invested in lhb but interested to consider viewpoints. The main reason for not investing in such a development is that i look for long development times so that price rises can be maximised as generally i sell before completion or shortly after completion.

Without "shelter????" Do you actually know where LHB is - or have you confused it with another development? LHB could hardly be more sheltered. If you know something we don't about the sea and the weather perhaps you can enlighten us?

I see you point re the longer building times suiting your style of investment but we're not all in it for the same reasons. Some have different plans.

[soennecken]

Here is a picture of the island to show the position of LHB.

Perhaps martinfields could use it to enlighten us on the position of Al Aakar?

[Yousuf27]

Thanks Soennecken - this clearly shows just how sheltered the position of LHB is. It has now occurred to me though that Martin may be aware that there are severe Katabatic winds which blow off the mountains during periods when there is quick cooling of the rock surfaces at night? This leads to cooling of the air in close contact with the surface which subsequently falls leading to a wind tending to blow offshore - sometimes a strong wind. Since there would be insufficient fetch there could be no significant wave-height attached to such a wind in the vicinity of Marjan Island.

So what could be the problem which we lack shelter from? Clearly Martin knows more than I do - so please do tell us what meterological calamity we need to be prepared for at LHB??

[Greg UK]

Hi guys,
I bought my apartment through Dream Homes Worlwide and prior to the purchase they were advertising LHB as 30% down and 70% on completion with 10 year INTEREST FREE financing provided by the developer. Now i reserved it and paid the fee they called me today that they just found out that unfortunately the developer can not offer the 10 year interest free option but what they can do is offer the interest free payment between now and the completion. It is nothing like the offer they advertised - that made the development and investment unique as no one else offered 70% interest free finance over 10 years. It did sound a bit too good to be true from the beginning but i and many others believed it. Now I have been advised to not pay a penny until completion and then get a mortgage from RAK bank with interest. I am really annoyed although I know the money can be made on capital appreciation i was still hoiping to make some money on renting the apartment. Now the rented apartment will cover the mortgage and maybe leave £20 in my pocket. Not very honest!
Anyone knows anything about it? What are the interest rates in RAK?
Any help will be appreciated.
Greg

[Yousuf27]

Greg, I bought through Select Property and they offered - Reservation fee + 15% upon signing contract + 15% after 6 months (from which the original reservation fee is deducted) and then 70% on mortgage arranged through Khoie upon comletion. I didn't have any detail of this mortgage arrangement at the outset (it wasn't available) but it's there in the contract. The interest rate is very high though at 5% over base. It might be possible to arrange funds with a different lender at the time of completion I suppose and that may well be cheaper than the developer's scheme. I believe UAE lenders attitudes to mortgages are constantly under review so it would be hard to say whether or not anyone will lend on LHB until nearer the time.

[martinfields]

Yes. LHB is definately in a sheltered position and not as i thought. on the plus side it is not facing directly to the sea but at the same time will not get direct sunlight during the day, although many could argue light is not something to worry about. LHB might for some people be too close to the entrance where traffic might be a problem, having said that it could be ghost town. LHB is very keenly priced as i notice some properties at around the 900 Dirhams per sq ft.

here is location of the 6 star marriott residential property :



I also have the latest masterplan that you can download from

http://www.pressbox.co.uk/images/master_plan.pdf

This is very important as it links in all the other development spaces.

The marriott development will face into the bay with a large beach and face the mountains. The direction is also in a direction that captures direct sun, of course personal choice and the aspect will be attractive. it is also surrounded for more green areas and, villas and houses and not squashed between other resorts.

the residential development at marriott will allow all owners to use the 6 star facilities of the marriott and hence offer a very high level of rental due to its connection and limited nature.

i am open to buying a few more properties on the island as the rates are very low and looking at a 3-5 year investment. The key to the success of the emirate is the financial off shore haven and this is a driving factor. Also the new conference centre is going to be a major driving factor.

interested in any other news or ideas people have found. many developments are about to be released in the next 12 months and many investors are piling into al marjan island as was the case of dubai palm etc.

[liamC]

sorry to jump in on the thread, but is this the same place where those pyramid type looking apartment things are going to be? does anyone know the name of that project, as i was trying to find a bit of info about them earlier but couldnt find anything?

[Yousuf27]

Martin - thanks for posting the plan; - it's good information.

I realise it's a case of personal preference but I would only want sunlight in my place just before sunset. The rest of the day - in the UAE - I'd be trying to keep the light out, so the benefit of having sunlight in my apt all day would be lost on me.

[martinfields]

in regards to mortgages my advice is to fill your boots up to what you can feasibly manage. The reason is that the real cost of money in UAE is negative. Inflation is far greater than the cost of money to borrow. Inflation is running at 10%+ conservatively, probably 15%+. This has come about because the dirham is pegged to the US dollar and to keep the peg the country needs to artificially keep interest rates low. until the dirham unpegs the currency you have one of those beauiful financial issues of essentially free money. The same happened to spain and most of the new EU members where internal inflation is greater than the cost of money but needed to have the EU interest rate leading to massive borrowing. in all such economies property shot up as it was a no brainer to borrow money and invest in property which rose with inflation. the same is the case here. When the dirham does unpeg (sometime in the next few years) buyers will also benefit from the re-rating of the dirham when converting back to your currency of choice. since starting investing since last year properties invested in to date have already risen in price by about 20%. My estimate is that by completion in 3 years most investors will see at least 50% appreciation.

[Yousuf27]

A very good point- thanks for that! That really puts the developer's mortgage deal into context. I hadn't thought to look at it in terms of UAE inflation. You mentioned before that your method is to flip during construction or at completion. Do you see less merit in holding on for longer term rise in property values, and renting in the meantime? Presumably rents will go up with inflation as well? The value of property will presumably also continue to rise fairly strongly on early completed preoperty right up until the whole of the Marjan Island construction process is complete; - presumably that will be say 5 years? Would that not be a good point to sell?

[martinfields]

turning over properties before completion or shortly after is generally the best way to keep your hands clean and leverage your investment.

Once you actually take ownership of the apartment you then have the realisation of service charges and thinking about renting the property out, all of which are suited to people who want an income stream. I prefer to stay clear of actually renting and leave this to someone better suited. lump sum capital appreciation is my aim and to get this back into the next exciting development somewhere else.

In my experience investing early in a development and trickling the 10% instalments is the best way. The good thing about UAE is there is no costs of buying such as stampt duty, lawyers costs are very low so flipping, as you call it, is very simple. You simply cant flip in most markets as the costs are quite prohibitive. RAK is far more attractive that Dubai and has more going for it. It is also slightly cooler and can learn from mistakes in Dubai that are numerous.

Remember that in Dubai they had a rent ceiling, which meant people are not able to increase rents to the rate they could. If inflation keeps going the way it is going RAK might be similar.

I will continue to invest in the area for the next 2 years and depending on the governments plans on the financial city they are building near by probably sell everything around 2010 as people realise the potential. Having said this rental income will be very good at around 10% net at least.

[soennecken]

Originally Posted by liamC

sorry to jump in on the thread, but is this the same place where those pyramid type looking apartment things are going to be? does anyone know the name of that project, as i was trying to find a bit of info about them earlier but couldnt find anything?

It is Bab al Bahr (by RAK properties I think). There is a forum here, but not very much info there.

[soennecken]

Originally Posted by Greg UK

Hi guys,
I bought my apartment through Dream Homes Worlwide and prior to the purchase they were advertising LHB as 30% down and 70% on completion with 10 year INTEREST FREE financing provided by the developer. Now i reserved it and paid the fee they called me today that they just found out that unfortunately the developer can not offer the 10 year interest free option but what they can do is offer the interest free payment between now and the completion. It is nothing like the offer they advertised - that made the development and investment unique as no one else offered 70% interest free finance over 10 years. It did sound a bit too good to be true from the beginning but i and many others believed it. Now I have been advised to not pay a penny until completion and then get a mortgage from RAK bank with interest. I am really annoyed although I know the money can be made on capital appreciation i was still hoiping to make some money on renting the apartment. Now the rented apartment will cover the mortgage and maybe leave £20 in my pocket. Not very honest!
Anyone knows anything about it? What are the interest rates in RAK?
Any help will be appreciated.
Greg

I did not use an agent but dealt directly with KHOIE and found them to be very flexible. Try giving them a call directly.

[dubai_nomad]

Does anyone know where I can get information on the other residential developments on Al Marjan island?

[Yousuf27]

UK based Select Property have just announced their new Developoment on island 4, plot BFR-10. It's 18 floors - that's higher than most developments on Marjan Island by some way and it has a private beach; infinity pools on the roof of each block. They talk about an unconfirmed completion date of 2010 - which is quite speculative with the island not even in place at present. Prices seem slightly higher than LHB. SP operate a stage payment plan (based on dates - not construction milestones) and there is a 15 year long term paymnet plan. They have 4 projects in progress in Dubai Marina.

[yecabel]

...

[danno]

Martin - I have been following this thread, took your advise and looked at Aakar. It all sounds very appealing, and with the Marriott backing certainly a sound choice. However, the current floorplans per apartment are, in my view substandard if you consider the price. They are selling 1 bedroom apartments without doors to the bedroom!
Type B - 1 bed - 5th Floor are going for GBP 165K. These appear to be the only decent layouts. Compared to other developments, do you not think these units are overpriced?
Management companies are talking about renting the apartments as office units - not sure I woudl like my apartment next to an office...

I have been looking at Royal Breeze, Al Hamra Village. With the plans for a rail link to Dubai, and the slower paced residential environment, golf facilities, Marina, private beach, apartment size and layout etc, these woudl seem quite attractive. In the longterm, commuters would be drawn to such a location, perhaps moreso than the mayhem and congestion that will be on Al Marjan.

What do you think??

[Yousuf27]

Danno, - what's the area of the 1 bed at GBP 165k? What's the price per sq ft in AED? That sounds pretty expensive unless the apartment is a very large 1 bed? Leaving doors off rooms is normally a developers trick to give an impression of "flow" and space where there isn't any. Also if one was wanting to let this for holidays and do it the way everyone does in brochures you would be saying "sleeps maximum 4 plus a baby cot" and the sofa in the lounge would be a double "sofabed." That sort of doesn't work if there is no physical closure of the bedroom for privacy i.e. a door. From a letting point of view this might a big difference to your income potential for the apartment. I haven't seen the plan of this apartment so I'm happy to be corrected.

[danno]

The apartment I mentioned was 860sqft @ 1350 dhs per sq ft

The others are all 750sq ft, but as I mentioned the apartments are narrow and poorly planned, although they are re-visiting the plans, apparently

Links are below:
http://www.7cinvest.com/pdf/aakarmar...idualplans.pdf

My original choice was a 1 bed in La hoya, sea view. With so many apartments and developments on the market, I am cautious as to the rentability of these and my rental returns.