30 May 2019

Even as Dubai’s property market is witnessing a price correction with demand gradually shifting to mid and affordable housing segments, the emirate’s luxury property segment has managed to hold its own with unique offerings.

“Dubai’s luxury real estate market is fast becoming an attractive proposition to a multitude of international buyers. There is an inherent resilience in the luxury market,” said Anton Yachmenev, Managing Director, Forum Group in an interview with Thomson Reuters Projects.

The developer had commenced the handover of its completed villas in XXII Carat project on Palm Jumeirah in February.

 “There is always a market for one-of-a-kind high-end properties. We are keen to capitalise on this trend by offering developments that take luxury living to the next level,” he said, adding that XXII Carat is the only project on the Palm where one can find villas with 25,000 square feett private gardens.

The gated community, offering 22 seven-bedroom villas ranging from 9600 to 3,6000 sq ft and two penthouses, has positioned itself as a unique development, targeting luxury-minded people from all over the world, typically from Europe and CIS countries.

“Our clients are aged 45 and above and are successful businessmen, owners of big companies, politicians and sportsmen. They tend to have big families and they are looking for a unique beachfront holiday home where they can enjoy the Dubai lifestyle,” said Yachmenev.

With stand-out features like the million dollar bath-tub carved from single pieces of Amazonian crystal by high-end Italian interiors specialists, the developer of XII Carat revealed that the promotion of their project was always aimed at the really rich and discerning community.

“That is why we used locations such as the VIP terminal at Al Maktoum Airport; the main entrance to TZUM, a luxury shopping mall in Moscow as well as the Burj Al Arab for promotions,” said Yachmenev, adding that this helped them firmly established XXII Carat as one of Dubai’s most sought after addresses.

He disclosed that to date, the company has sold 70 percent of the units in the project.

With the convenience of 24x7 concierges and a luxury hotel like spacious accommodation, XXII Carat’s Mediterranean styled villas feature exclusive private beach-front spanning 720 feet and offering 360-degree views of Dubai city and the Arabian Gulf.

“Buyers are making an important distinction between true luxury and aspirational luxury and that is hugely positive for us,” he said. 

Luxury demand

Knight Frank’s Wealth Report for 2019 has projected an increase of 22 percent in global population of Ultra-High Net-Worth Individuals (UHNWI) and 15 percent in the Gulf over the next five years. It said 27 percent of the UHNWI population from the Middle East is looking to buy new homes outside their country of residence in 2019.

With the UAE, according to the same report, emerging as the fourth most preferred country for buying a home among the wealthy in the Middle East, Dubai stands to gain considerably from the flow of this investment.

“A decade ago, Dubai was not a place to buy a home and settle down. It was transient and short term and wasn’t taken seriously as somewhere you might want to spend the next 20 to 30 years of your life,” recalled Yachmenev.

“But that has changed dramatically. There is now a trend of discerning buyers choosing a permanent home in Dubai,” he said.

Though conventionally, the UK and the US are the top preferred destinations among both the global and the Middle-East UHNWI because of the stability of their institutions, Dubai continues to draw some traffic as it offers competitive deals at many fronts. 

For instance, according to Knight Frank analysis, one can buy 143 square metres of prime property in Dubai with one million dollars against just 31 sqm that he or she will get in London for the same amount.

And that seems to be working in favour of Dubai, with the emirate’s prime residential market registering 44 percent increase in sales volume in the first quarter of 2019 against the previous quarter, totalling 10.6 billion UAE dirhams, according to an analysis by Luxhabitat of data by Property Monitor.

The report further revealed a buoyant property market on the Palm Jumeirah, which recorded sales volume of 1.13 billion dirhams in first quarter of 2019. 

Immune to the price cycle

While the real estate industry in Dubai is shifting gears to mid and affordable segment with liberal payment options, Forum Group believes in staying the course it has charted for itself.

“The effort is to give an experience in luxury that would make the project immune to the real estate price cycle,” said Yachmenev.

“Provide one-of-a-kind luxury development” and “stay focused on the long term”, are the mantras that the group resolutely has followed and that has seen it through the trend, he noted.

“The idea was to position XXII Carat as a one-of-a-kind luxury development - a place that well-heeled residents could truly call home, where no expense had been spared,” he said.

When everyone around was re-strategizing their price points and payment plans, Yachmenev said Forum Group showed adaptability without losing the focus on what it had set out to build.

“With any project, there are always challenges that need to be overcome. For Forum Group, the aim with XXII Carat was always to go that one step further and ensure we responded to any changes and challenges that presented to us,” he concluded.

(Reporting by Syed Ameen Kader; Editing by Anoop Menon)

(anoop.menon@refinitiv.com)

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