Clever Condos
Another company looking to benefit from the hospitality boom is SKAI Holdings, which recently recorded sales worth AED2.4bn ($653m) following the launch of its AED3.67bn ($1bn) Viceroy Dubai Palm Jumeirah development in May.
The firm, which partnered with Viceroy Hotels and Resorts, announced it had sold 470 hotel rooms and hotel apartments and 219 residential apartments and villas to date in a freehold sales model, which allows investors to lease back their room to the hotel and earn revenue on its use, which SKAI estimates will offer an annual rate of return estimated at 12%.
“Investors have been extremely keen to purchase property in this exciting new project... buyers have been particularly interested in purchasing the hotel rooms, which is a unique business model here in the UAE,” said SKAI Holding chief executive officer Kabir Mulchandani.
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Dubai-based developer Seven Tides is also receiving increasing interest from investors for its Anantara Residences Dubai project, which forms a part of the Anantara Dubai The Palm Resort and Spa on the Palm Jumeirah.
The project comprises 442 fully furnished one and two-bedroom apartments, as well as a limited number of penthouses, which are designed to be a more attractive investment opportunity than a traditional residential development would be in the same location.
“The starting price for a one-bedroom apartment is AED2.4 million (US $654,000). In comparison a Palm Jumeirah Shoreline apartment of similar size is on the market for AED2.2 million ($599,000). But in terms of financials that is where any similarity ends,” commented Seven Tides CEO Abdulla Bin Sulayem.
According to Seven Tides’ announcement, a hotel room (or residence with access to five-star resort hotel facilities) could generate as much as AED 190,200 ($51,797), almost double the AED 100,000 ($27,233) annual rent a Palm shoreline apartment realises.
“Anantara is a luxury five-star resort and as such would attract room rates at the top end of the scale. Many investors are now looking for the flexibility to generate supplementary income by leasing their apartments when they are not in Dubai” commented Bin Sulayem.
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