21 June 2023, Arabian Business
Investors in the much-delayed but highly anticipated Palm Jebel Ali are forecast to hit a jackpot, with the luxurious residential properties in the island project projected to generate a whopping 85 percent return on investment (RoI) over a five-year period – the highest amongst some of the latest launched or announced real estate projects in Dubai.
Even on a short-term basis, investors in the project could expect a minimum return of 25 percent in the first year following the project’s launch, according to an AI-based forecast made by a proptech firm in Dubai.
As against this, few other high profile projects unveiled this month such as Emaar’s ‘The Oasis’ and Sobha Developers’ ‘Seahaven’ are projected to rake in over 20 percent and 10 percent return on investments over a three-year and even less holding period, respectively, according to the forecast by Realiste, a leading real estate investment advisory firm.
Significant value appreciation predicted
“Based on the expected market dynamics and the island’s remarkable development, our AI-based analysis forecasts an impressive 85 percent return on investment (ROI) over the next five years [in Palm Jebel Ali], with a minimum ROI of 25 percent in the first year following the project’s launch,” Realiste said in a report made available to Arabian Business.
Arabian Business, however, has not independently done any study on Realiste’s projected RoI figures for these projects.
“With the recent green-lighting of this remarkable development by Sheikh Mohammed bin Rashid Al Maktoum, Vice President, Prime Minister, and Ruler of Dubai, Realiste foresees exceptional growth and returns for investors,” the report said.
“As the project enters its pre-launch phase, Realiste predicts significant value appreciation in Palm Jebel Ali properties,” it said.
The much-hyped but also much-delayed island project features luxurious villas and apartments, offering investors a diverse range of options.
Realiste said its projections indicate a minimum ticket value of $50 million for property investments in Palm Jebel Ali.
“Specifically, for villas, we anticipate a projected price of AED30 million per unit,” the report said.
Palm Jebel Ali, which is twice the size of Palm Jumeirah, will also introduce more than 80 hotels and resorts, providing new beachfront homes for approximately 35,000 families.
The man-made island, which is located south of Jebel Ali Freezone, was originally conceived in 2002 as a way to expand Dubai’s coastline and create a new tourist destination.
However, construction was halted in 2008 due to the global financial crisis.
The Realiste study showed the newly unveiled residential projects of both Emaar and Sobha also ticking most of the boxes for investors.
“Our preliminary recommendation [for investors] for ‘The Oasis’ is that it will be a long-term strategy for villas for a period of 36 months or more, while that for Sobha’s ‘Seahaven’ (building 2), it’s good for saving capital or for short-term and daily rent,” the Realiste report said.
Realiste said its forecast for the Emaar project is an over 20 percent expected return on sale and an expected rental yield of over 5 percent, while that for the Sobha project is an expected RoI of more than 10 percent and rental yield of about 5.3 percent.
The projected price for residential units in Emaar’s Oasis is $2.2 million (AED 8.1 million) onwards for 4-bedroom BR villas, while residential units in the Sobha project is projected to be starting from $1.03 million (AED3.8 million).
Realiste said both the Emaar and Sobha projects are located in premium areas – the Emaar project in the Jumeirah Golf Estates area is located next to the world-famous Fire and Earth golf courses, and Sobha’s Seahaven is just 5 minutes by car to Palm Jumeirah and within walking distance of Dubai Marina Mall – are therefore could fetch good returns on a long-term basis.