It was just sold for 125 million dirhams ($34 million), setting a record in a market that continues to gain from an influx of foreign cash. The property is a collection of sand on a man-made island in Dubai.
This is not a magnificent mansion. It’s not a designer flat or a high-end penthouse.
It was just sold for 125 million dirhams ($34 million), setting a record in a market that continues to gain from an influx of foreign cash. The property is a collection of sand on a man-made island in Dubai.
The sought-after Jumeirah Bay Island, a seahorse-shaped sliver of land connected to the Dubai mainland by a bridge, is home to the 24,500 square foot vacant parcel. This equates to a price per square foot of over 5,000 dirhams, which the agency handling the purchase, Knight Frank, described as a new high. The purchaser, who does not reside in the United Arab Emirates, intends to develop a family getaway home on the land. His identity was kept a secret.
“It’s 125 million for sand,” asserts Andrew Cummings, head of premium residential at Knight Frank in Dubai. “Spectacular mansions, magnificent penthouses, and other such items have been featured heavily in the news lately. However, this simply breaks a lot of land plot records.
According to the Dubai Land Department, the property was bought two years ago for 36.5 million dirhams, earning the seller a respectable 88.5 million dirham profit.
While new, long-term resident “golden” visas are luring other wealthy individuals to invest in Dubai real estate as well, Russian people have been buying up houses in a city that is still embracing them with open arms. The city was once constrained by overbuilding, but some brokers now claim that there is an undersupply of properties, especially on the upper end.
According to Lyndsey Redstone of Knight Frank, one of the deal’s brokers, “Sellers are in quite a strong position to dictate where the prices are at the moment because there are so few options available for people to choose from, especially beachfront.”
The parcel that sold last week was one of only 128 that government-backed developer Meraas Holding initially offered on Jumeirah Bay Island, making it relatively exclusive when compared to, for instance, the thousands of residences on the renowned Palm Jumeirah complex. All of the parcels had been sold off at one time or another years before, and some of them had since been sold again for a healthy profit. The land cannot be divided due to the master development regulations, but some buyers have merged plots to make room for megamansions, according to Cummings.
On the island, only a few houses have been finished. Many more have yet to break ground, while some are still being built.
High oil prices, the desire of the wealthy around the world to store their wealth in real estate, and the perception that low-tax, low-crime Dubai is a haven in times of pestilence and war have all contributed to the city being such a frothy real estate market.
The Bulgari Resort, one of the priciest hotels in the city, and the upcoming Bulgari Lighthouse tower, where flat selling prices have been rising even before it is constructed, are both located on the island. February saw the sale of the top penthouse, a nine-bedroom residence with five parking spaces, for 410 million dirhams.
Brokers in real estate forecast that records will keep falling. For instance, the seller in the Jumeirah Bay Island deal also owns the identical site just next to the first one. The price he intends to ask is 135 million dirhams.
