The Dubai government recently passed a decree allowing expatriates to purchase freehold land plots in Dubai South, allowing overseas investors opportunities amidst the expected property boom as Expo 2020 approaches.
In Dubai, plots are available in both leasehold and freehold areas, with the former having a tenure attached to the plot, whereas for the latter, the investor owns outright. Expat investors could be hoping to build commercial or residential accommodation for themselves or development companies looking to sell to third parties.
Traditionally in Dubai, land has proved to offer far better returns than residential units, outperforming ready unit prices twice over since 2003. However, the ultimate value of the plot purchased is of course dependent on the final product built upon it, with more attractive initial prices offered before the infrastructure is complete and whilst nearby plots remain under construction.
The key areas in Dubai where freehold plots are currently available for sale are Dubai South, Business Bay and Pearl Jumeirah, as well as Al Furjan, Dubai Sports City and Jumeirah Village South. Older areas such as Bur Dubai, Karama and Qusais are excluded. However, plots are scarce to come by in the heart of Dubai.
UAE associate of Savills, Edward Macura, explains: ‘The plots in higher demand are in the more established and mature areas of Dubai, such as Dubai Marina, Downtown and Jumeirah Lakes Towers, which are currently quite scarce. However, there is more of a selection in secondary locations such as Al Furjan, Dubai Sports City and Jumeirah Village South.’
Average Dubai plot prices can range from Dh60 per sq ft to Dh100 per sq ft in lesser locations such as Dubai Silicon Oasis and Dubai Sports City, informs Macura, growing to a sizeable Dh250 per square foot to Dh350 per square foot in prime postcodes such as Downtown Dubai and Dubai Marina.
Macura continued: ‘We are now seeing a number of expats also entering the market. Like we have seen in Emirates Hills and sections in Jumeirah, the buyer profile is varied. However, we see more traction from high net worth investor Indians, Pakistanis and other Arabs [particularly Lebanese], in addition to GCC investors and western European investors. Russian investor interest has dwindled in the past few years.’