Business Bay a key area for more land development says fäm Properties chief after company secured AED700 million plot deal
The value of annual land sales in Dubai has risen by AED30 billion over the last five years, one of the emirate’s biggest real estate brokerages revealed today, identifying Business Bay as a key area for further growth.
Firas Al Msaddi, CEO of fäm Properties, said that as of 9th November land sales for this year had reached AED68 billion compared to AED38 billion for the whole of 2012.
Underlining a growing land-for-development shift by investors, Al Msaddi said the company has just sold a AED150 million plot in Business Bay to a developer new to the Dubai market.
They are now working together to develop a residential tower on the 500,000 sq ft plot in a deal which will ultimately be worth more than AED700 million.
“Since 2012, particularly in the Business Bay area, we’ve witnessed a definite upward trend for both the value of land transactions and the size of plots being bought,” said Al Msaddi.
“Over the past five years, with overall land sales in Dubai rising annually from AED38 billion to AED68 billion, Business Bay has seen an increase from AED482 million to AED3.3 billion. At the same time, the total area of land sold has grown from 731,000 sq ft to 2.5 million sq ft.”
Added Al Msaddi: “Business Bay has witnessed enormous improvements recently and the opening of the new canal extension has freed up the area for a new range of developments. The new developer we’re working with there sees great opportunities in Dubai, and their first investment here will ultimately be worth upwards of AED700 million.”
Over the past few years, fäm Properties has transacted land sales in Dubai worth more than
AED3 billion, and Associate Partner Tarek Bou Karroum says the growing demand for specialist land advisory services is a sign of how the market is maturing.
“Market conditions since 2014 have made it impossible to buy and sell land for profit in the short term, and the emphasis has shifted from speculation to developing plots as a long-term investment,” he said.
“Developers and individual investors who recognise the potential are turning to development management companies with a proven land advisory record to help them secure the best plots and build according to demand.”
Karroum has worked closely with Saudi-based ARTAR Real Estate Development on Mada Residences, the 36-storey luxury residential tower in Downtown Dubai set to be delivered on schedule next summer.
He says the project is an example of how the Dubai property market is maturing, not only through the fading away of speculators, but also in the adoption of more sophisticated research, and marketing, to bring the best return on investment.
“There’s a much bigger emphasis on market research in particular, not only to identify the right plot of land, but to develop property which meets demand because of a unique offering,” he said.
Recently, fäm Properties topped AED1.6 billion in residential property sales at City Walk, the new destination developed and managed by Meraas in the heart of Jumeirah.