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Your Personal Property Investments & The UAE Real Estate Market

4989986 Views 37796 Replies 1592 Participants Last post by  Losh100
actually there have been so many threads about specific questions on specific properties like towers.

in my opinion it has become too much and a lot of double threads have been created.


this is why i go for a new sticky thread in which everybody is welcomed to ask our members about their views on specific property, private investment ambitions and the property market in general.
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Thanks for clarifying this, I was wondering why so many units in Panorama are being offered at below the average price per square foot in the Views. I thought it was because the sizes of the units is small (2 bed size 1,250 sq.ft.) or perhaps because the location is in the corner and few units actually have a proper golf course view. I can't comment on the quality of finishing because i havent seen it.

Although as an owner/Landlord in the Links, I am concerned that Panorama rents may drag down the RERA rental index.
Dubai first off plan project post the recession and real estate bust saw investors lapping up all 224 apartments in a matter of hours.

Now that this project is handed over a very unique situation is developing.

Most of the investors were looking to book their profits. Some did during the construction phase. Some are looking to exit now. And some have not made any construction linked payments beyond the initial 20% - 30%.

The project is now complete with keys expected to be handed over by 30th Nov 2014.

The off plan buyers who have paid only 20%-30% are facing issues making 100% payments. Hence offering heavy discounts to exit.

It wont be easy as Emaar will impose penalties on pending payments. Getting NOC will be difficult and DLD transfer process will incur additional 4% transfer fee (a wasteful expense considering handover is just a few days away). Am not sure if Emaar will cancel these SPAs as the buyers are in breach on their contract.

These distress deals are all over dubizzle and a 3 bed golf course facing apartments are listed for AED 3.1 million. Golf course facing duplex apartments are listed for AED 4 million. Avg PSF rate is coming to approx AED 1600+.

It's quite funny to see that average asking PSF rate for Golf Course facing units in Tanaro or Fairways West or Golf Tower are quoting @ AED 2200+ PSF while similiar units in Panorama are @ AED 1600+.

Last months REIDIN sales data on Views also indicate avg PSF of AED 2000+.

These distress deals have been around since the past six months but no one is taking the bait of these distress prices considering the issues with such deals and transfer process.

Its important to note that this is not a reflection of any market conditions.

Meanwhile avg rent for a 3 bed golf course facing apartment is being quoted at approx AED 235K per year. And apparently there is tremendous interest.
Hi Sanjay,

I'm in the market for a 8-9% net rental yield. Would appreciate some pointers on which buildings/developments to look at. You can PM me if you prefer:)

Regards,

The Pimp
If you want to know where prices will be in 4 years time, ask yourself where you think rents will be in 4 years time.

There has never EVER been a time in Dubai where property prices did not correlate directly with rental yield.

It is an investors market, not an emotional one.
Well said Sangay, but by that rationale, the palm doesn't have any lower end studios.

Palm views studios for example are offered for around 1.3m and renting for 85k gross?
Two things my two post pimple:

ONE

I've no problem telling you in general terms, that lower end and small units (size) and by description (studios) give us a higher yield.

Be warned size is important. There is no point having an 800ft2 studio.

TWO

We are looking at the palm now. The next two years will see what we believe is big change. This will trigger further development and off it goes
Sorry i don't understand what you are saying.
oh, it's YOU.

Dig a bit deeper (I did), and check your 'dar....
Yes now that's interesting.
I do own a 2 bed in JBR bought a few years ago making 9.5% net today so i wanted to expand my portfolio. Just thought i would bounce some ideas on here.
I've found 1 and 2 beds in the marina for 8.5% to 9% gross / 7.5% net yield if your interested.
You are referring to MiNC property. The actual owner of the project is Sheffield real estate, they have another building underway at the mina siyahi end of marina.
They didn't ask you for installments because none of the original buyers are acknowledged by them as buyers. Probably resold or being privately funded by the owner.
MARINA SUITES
The above project seems to have been re-activated. Does anyone know how has it come back to life when the original developer who sold the project went burst. Anyone who can give any lead will have our heartfelt thanks. Our relations bought into the project and are struggling to find out who to contact. Amazing though, construction work is going on and nobody has asked us for installment payments.
All of MiNCs developments are under offshore special purpose vehicles made to protect the parent company. As far as i know, MiNC did not own the plot, otherwise they wouldn't walk away from that much equity. The problem is your purchase agreement is with waterfront development which was dissolved a long time ago along with MiNC so if you do approach Sheffield real estate, they will probably shrug it off.
Many thanks for the info. As far as I can see from the documentation, the plot is owned by MiNC Property Enterprises and the SPA issued by them names Waterfront Developments Limited, an off shore company as the Seller. The correspondence received by the buyer from Waterfront names Sheffield real estate as the developer. The point is if MINC/Waterfront did own the project, our equity as unit holder stands protected and the new owners of the project take the project subject to our equity as unit holder. We shall appreciate if anyone can direct us where we can get the full facts.
Big name developers offering finance in the form of payment plans, transfer fee waivers, free service charge periods, clone master developments and 5% to 10% commission to an army of brokers. How can any secondary market seller compete with that? Brokers won't even talk to you if your not selling "below market".. Meanwhile your yield is being eroded by falling rents and high service charges. And Ofcourse Holiday homes is the latest buzzword.
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The off-plan wheel is still spinning with the Lions share of transactions. Could be they are consolidating the construction pipeline before starting again a fresh batch of new master developments for 2030.
6m for Marina Residences looks very expensive vs current launches. So the question I have would be - how much lower can the developers go on pricing? The point at which they have barely any margin would be a logical bottom.

I recently bought some property because the launches are way down and prices look very cheap. Fully willing to be wrong for a little while. Right now seems like the peak flood of handovers (just look at Downtown with 7+ towers handing over now and in the next couple of months). This will continue through 2021, but slowing in 2022, and way lower in 2023/24.

Does that assessment sound about right?
What percentage are the service charges eating from your rental yield?
Add to the new supply that holiday homes are being restricted from operating (signing a waiver to get permits) which adds more pressure on long term rental contracts.
Most of my portfolio is in Downtown. The rental yield compression in the past year has been awful. Burj Vista, Vida Downtown, Address Fountain Views all coming into the market this year. Same issue expected for next year and the year after.
It's all priced in.. and the amount is so small compared to the purchase price, it's hardly noticed. So 15k per annum is 45k for 3 years. Add that to a purchase price of say 1 million it's nothing.
Offers of Service Charges Waiver by Developers?
For attracting customers, some of the developers are offering a waiver of service charges for a certain period.
As service charges are collected by Owners’ Association and not the developer for the maintenance and operations of facilities in the common area; and for accumulating reserve funds for future major requirements, I wonder how these offers of waiver of service charges by developers make any sense.
But how can they hold you liable for this debt? If you ignore them and don't pay up.. will they impose a travel ban or something?
Turns out it wasn't a scam. My agent visited the Land Department who confirmed the payment demand was authentic. It seems as though the developer had received a lengthy payment deferral from the Land Department which meant that they collected registration fees from investors back in 2008 and have held the money in a deposit account until now. Yes, I know!

The Land Department are now sending demands directly to the investors. Title deeds were still being issued but the debt still existed. I am surprised the Land Department didn't claim the amount via the NOC process when I sold the unit a few years ago.
Are the 2 units with select? In that case they will probably hold your NOC to sell for ransom until you pay. Personally, I wouldnt pay until I have to sell.
I still have two other units and if I try and sell one it wouldn't surprise me if they were able to withold money at the point the sale goes through the Land Department. Their database will surely have owner details (name, passport info) attached to the deeds.

I wouldn't be surprised if they are chasing other investors who bought off plan who have since long gone and have no other investments.
I read in today's news that they are close to selling their district cooling business. So much for long term.
Emaar has been divesting hospitality-related assets.
In 2018, it disposed of five hospitality assets, which were sold to Abu Dhabi National Hotels.
It is now selling the observation decks of the Burj Khalifa, which is a tourist attraction.
These are happening while it is anticipated that Expo 2020 will cause a big boost to the hospitality sector in Dubai during the duration of the expo and thereafter.
These are two contradictory signals for investors in the hospitality sector.
Can anyone highlight, if I am missing something in my observations?
-30% seems to be the magic number for sales and rentals. At least there aren't many new developments within JLT and immediate surroundings. It's worse in the likes of Dubailand and JVC were buildings are just popping up. Tenants are migrating to newer and bigger space.
I rented out my one bed 880 sq feet apartment in JLT for two years for 68,000 AEDs per annum. The tenant vacated in August last year. The apartment remained vacant for six months and now I have rented it out for 46,000 aeds. Things must be very bad at present?
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If the whole building license was converted from hotel apartment to residential then by default they cannot run your individual unit as a hotel apartment and charge tax. It's actually a good thing because as a hotel you will go into a rental pool and they will take 40% of the rent and you have to pay high maintenance charges + management fees and tax. Plus resale is difficult because end users cannot buy. You're better off with residential.
Is that the Seven tides project? I'm still receiving emails from broker's promoting it, received one today in fact. Why are broker's trying to sell it if it's cancelled.
Seven city Jlt
What is the completion date in your SPA? They usually have 12 months extra on top of that date without penalties on either side.
Cancellation will take a very long time. I worked for a developer in '06-'08 with several buildings in JVC cancelled. Until today few buyer's are still fighting for their money, others gave up. There was no escrow account at that time.
Thats what their sales team keep saying that project "will" continue, however

1) DLD website says under cancellation
2) Last activity on site was in August 2019
3) Zero communication from JLT on progress or bottlenecks
4) project started in may 2018, till date they have managed to construct 8%
5) They are fooling us by saying approvals are pending
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That 35% obviously has their profit mark up built in. I renewed for my tenant in JBR in April for 10% off and another property in March for 8% off.
Anyone know about a short term rental company in Dubai called Blueground? They are requesting up to 35% off agreed rentals to their landlords and I wanted to know if this seemed fair?

Problem is some landlords might just say no and some might say yes?!?
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