Tuesday, July 23, 2024

Dubai Apartment sold for Record PKR 15.6 billion

A five-bedroom flat sold for a record-breaking $55 million in Dubai. During the COVID-19 epidemic, luxury real estate in Dubai saw a boom as the wealthy became even wealthier. (Representational)

One area of Dubai’s real estate market is becoming increasingly popular with wealthy people looking for somewhere to hide their money: flats and townhouses with a brand name, such as Four Seasons, Bulgari, and Cavalli.

As foreign purchasers continue to acquire ultra-luxury homes, sales of those properties are rising in Dubai, which has emerged as the global capital of so-called branded residences. This week, a buyer agreed to pay 203.1 million dirhams ($55.3 million) PKR 15.6 Billion for a five-bedroom, Baccarat-branded apartment in a project that hasn’t even broken ground yet. It is the most expensive per square foot at 14,000 dirhams.

According to Dubai land records, it tops the previous record established in February, when a five-bedroom apartment in the Bulgari Lighthouse sold for 160.3 million dirhams or 13,751 dirhams per square foot. The skyscraper will be constructed close to the jewellery company’s hotel and resort on a seahorse-shaped artificial island.

As the COVID-19 pandemic made the wealthy even wealthier and Russians sought safe havens for their money following their nation’s invasion of Ukraine, luxury real estate soared in Dubai. In October, the price of prime real estate increased 89% over the same month last year, reversing a decline from 2014 to 2020. Many were caught off guard by how swiftly the market moved higher. The four Seasons Residences project in Dubai had villas that went for approximately.

According to Knight Frank, the swell increased the price of branded flats sold in Dubai to a record 25.3 billion dirhams in 2022, accounting for roughly a fifth of the total cost of all apartment purchases in the city.

According to Faisal Durrani, head of Middle East research for Knight Frank, “their appeal has been supercharged by the wall of wealth from the ultra-rich that continues to target the city’s premium residences.”

Because they can frequently sell apartments for 30% more than non-branded residences, depending on the region, developers want to partner with luxury names. The standard compensation for putting your name on anything and controlling quality is a commission from each sale plus an annual management fee. Buyers, on the other hand, might be fans of the brand, enjoy the higher standard of amenities that frequently far exceed those of non-branded developments, and have the security of a name they can trust, which is crucial for pre-construction sales and those buyers who are buying the real estate sight-unseen from abroad. Moreover, apartments frequently come furnished.

There are dangers associated with these assets. Although uncommon, the brand name could be dropped, said Scott Antel, founder of Scotts FZ, a boutique hospitality legal advisory. There are numerous causes why it might occur: A homeowners organisation can decide the management costs are too high.

The hotel attached to the residential portion of the building is either sold or needs to be maintained to a high enough standard. Or, based on the contract, the developer can change brands before the delivery of the apartments. If I were a buyer, I find that extremely troubling,” he said. “I purchase a Lada, and then I get a Ferrari. They respond, “Well, it’s still an automobile,” after which. Even though it’s a vehicle, it’s not what I paid for.”

None of the risks are deterring investors, who are buying-and already flipping some homes-as more are planned. Units in the Four Seasons residences on the creek have already been resold. And another Four Seasons residences is in the works for the city’s financial center.

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