Palm Jumeirah: an iconic real estate venture
Its Location and status have worked in keeping its perceived value competitive
By: Mohanad Al-Wadiya
There are few images used by the brand and marketing gurus to market Dubai globally and one of them is the aerial shot of The Palm. The uniqueness of this man made icon rising from the Arabian Gulf has seen its image used repeatedly in the world press when Dubai.
Despite its meteoric rise to fame and iconic status, the Palm, along with many other iconic real estate ventures caught up in the Global Financial Crisis. Nakheel, the developer, suddenly faced its own financial issues as the credit markets dried up around the world, investors either lost their risk appetite or went bankrupt and real estate values crumbled. The Palm’s development slowed dramatically in the post 2008, and a solution had to be found.
History has shown that values on the Palm did not decline at the same rate as with other developments. While villas in other projects lost as much as 50% of their value, the average decline in value for a Palm villa was around 30%.The same can be said for apartments with values declining by up to 60%, while apartments on the Palm declined by a comparatively favorable 35%. What a testament as to how location and status as an icon have worked in keeping its perceived value competitive.
The Palm never lost its luster and appeal as an aspirational location. Many investors were just waiting to see how much additional value waiting out the recession would bring and now they are back to get a slice of The Palm Jumeirah pie, so to speak.
The revival of interest in investing in The Palm and other iconic Dubai developments has been brought about by important factors. A modicum of world gloal recovery, a local economy which rebounded to grow at around 4% per annum, a competitively affordable dirham, and the fact that Dubai’s property values have fallen by as much as 60% from the glory days have brought back investors considering the gains at hand.
The writer is the Managing Director of Harbor Real Estate
The Palm Facts
This man-made structure is in the shape of a palm tree and consists of a trunk, a crown with 16 fronds and a surrounding crescent island. It includes hotels, Villas, apartments, Beaches, Marinas, restaurants and retail outlets.