The world’s biggest builder China State Construction Engineering and the Dubai-based property investment firm Skai Holdings said they have sold 98 per cent of their planned glitzy hotel apartment scheme on the Palm Jumeirah.
According to the partners, buyers have been found for Dh2.4 billion of off-plan sales at the partly completed 702-room Viceroy Dubai Palm Jumeirah hotel.
In a statement yesterday Skai said that it had secured off-plan sales for 470 of the 481 hotel rooms in the Dh3.67 billion scheme and 219 of the 221 hotel residences since they were put on the market in May.
“Investors have been extremely keen to purchase property in this exciting new project, which we believe will become one of the region’s most sought-after resorts. Buyers have been particularly interested in purchasing the hotel rooms, which is a unique business model here in the UAE,” said Kabir Mulchandani, the chief executive of Skai Holdings.
The developers said that construction of the project was currently under way, with all of the shoring excavation work now completed and work on the piling and foundations set to start this month.
The partners have been selling the multimillion dirham hotel rooms and residences through a model which allows the hotel operator Viceroy to lease them back in exchange for 40 per cent of the room revenue. They say that based on current market conditions, this should give investors an annual return of about 12 per cent.
The news comes as demand for off-plan property sales in Dubai returns.
Yesterday [17 September] Deyaar and Dubai Properties Group announced they had sold out of the first phase of their Central Park residential tower in Dubai International Financial Centre. And earlier this week Emaar announced it would be staging four sales launches to sell 178 serviced apartments it plans to build next to The Dubai Mall.
During the previous boom speculative off-plan property sales were blamed for pushing up prices to unsustainable levels, with contracts changing hands for huge premiums while property development failed to keep track.
This month the British bank Standard Chartered warned that although in its opinion the Dubai property recovery currently appears sustainable, there is a danger it could become speculator-driven again if the authorities are not wary.
“At the moment, the market seems to be driven primarily by fundamentals rather than speculation,” the report said. “Although there is a risk that this could change, it is encouraging that regulators are drafting laws to curb excessive speculation in off-plan properties.”