Villas and Apartments at the Palm Have surely outperformed similar properties in Dubai
By Mohanad Alwadiya
Special to properties
Property owners at the Palm can now breathe a little easier. On the average, villas have increased in value by 23%year –on- year at the end of the first quarter of 2012.Some villas have even managed to reach their pre-recession values. This performance outstrips the market average where villa values are estimated to have grown to around 13%. Apartment prices in Palm Jumeirah increased by 9% to 13%, depending on the configuration, easily outperforming the average price increase in similar properties across the emirate.
But a project will never attain its true value until its completed .Nakheel, fresh from sorting out its debts woes announced a first quarter 2012 profit almost $100 million causing some eyebrows to raise, not just in amazement at the embattled developer’s comeback, but in curiosity about what’s in store at The Palm.
The answer lies in the project known as Palm Views East and Palm Views West. They will comprise of 190 studios catering to a ‘younger occupier ’demographic. In a strategy seemingly aimed primarily at investors instead of owner-occupiers, Nakheel will be charging around Dh1 million for each of the studio properties. Each apartment has an approximate gross area of 500 square feet. While definitely more affordable than the traditional Palm property, approximately priced at Dh2,000/sq.ft., these studios continues to reflect the premium expected from such a location. If an investor intends to retrieve a net return of 7% on a studio, he would be renting the same for around Dh85, 000 to Dh90, 000 per year, depending on service charges. The units are not outrageously expensive (check out a studio in a comparative location in Hong Kong) but not exactly cheap either. Nakheel expects to hand over the apartments, along with a selection of retail and food outlets, in the first quarter of 2014.
If you are a current property investor in the Palm, this is great news. The Palm’s overall performance and these new projects offering residential and retail spaces are sure to attract more people into The Palm. Nothing drives investment more than confidence.
The writer is the Managing Director of Harbor Real Estate
• Apartment prices in Palm Jumeirah increased by 9% to 13%
• Villas increased in value by 23% by the end of the first quarter in 2012
• The Palm Views East and West cater to a “younger occupier” demographic