Freehold Jumeirah: developers continue to push the boundaries in Dubai
One of Dubai's smartest residential areas is about to witness the construction of its first freehold estate. Christopher Sell goes on site at Acacia Avenues in Jumeirah to witness the lengths developers have to go to in Dubai to retain the publics' interest.
Nestled within the smarter enclaves of Dubai, Jumeirah has long been synonymous with a more salubrious style of living. Among the villas and palatial mansions that stretch along the coast towards Dubai Marina, a new project is underway that illustrates the lengths real estate developers are going to entice customers to purchase property.
Launched by Abyaar Real Estate Development in December 2006, Acacia Avenues is billed as the first freehold development in Jumeirah. Adopting the real estate mantra of ÃƒÂ¢Ã¢â€šÂ¬Ã‹Å“location, location, location' the US $550 million project is being designed as an exclusive gated community, which comprises 50 villas and two towers. The 94,000m2 site, adjacent to Knowledge Village, is scheduled for occupancy in 2009. Designed as a first-class community, with pedestrian access throughout, Acacia Avenues will feature premium facilities including a luxurious health club, swimming pools, spa, squash court, cafes and shops. The initial phase of the project will see 50 villas and the Olgana tower, which will feature 137 apartments. The second phase will see the release of the second tower called Hilliana.
Wade Adams is the main contractor for all infrastructure works with Cansult Maunsell the consultant. Modern Executive Systems Contracting (MESC) is the main contractor for the villas. Atkins is the consultant for the villas, while Turner is the project manager. The main contract for the two towers is yet to be awarded. MESC was also appointed principle contractor by Abyaar for its Dubai Marina Towers Pier 24 and Pier Eight.
But within the fiercely competitive market of Dubai, it is increasingly obvious that high-end developments are becoming fairly standard, with any developer claiming to offer deluxe or luxury living as the norm. Acacia Avenues effectively demonstrates how much the market is evolving as developers continually strive to push the boundaries, not necessarily in innovative construction techniques or the implementation of new contract formats, but in project concept as well.
Abyaar's managing director Marzooq Al Rashdan, says that while the freehold offer is a unique selling point, even this isn't enough and location, while high on any list, is not a mutually exclusive guarantee of success. An exclusive gated community offering freehold is certainly different but the constant demands of the emirate mean that even this isn't enough. It is about establishing a niche in the market - a brand that is most important, he says.
"For any project in real estate, it is about location. But with this location, you must put in the right idea. It isn't just high-end, but high-end with the established brands. We have the famous interior designer (Matteo Nunziati) for the villas. And soon we will be announcing the interior designer for the two towers; more famous than Armani in interior design."
This attitude is exemplified by the announcement that Banyan Tree resorts will be managing the entire development under its Angsana Resorts and Spa brand. "Luxury is just a word, there are very few luxury high-end projects that are freehold. We don't want to talk about luxury or deluxe. You will see a brand for us, we don't talk about marble from Italy, we are going to talk about the brand delivering this. We will bring everything from the best brand."
Italian designer aside, the construction has typically demanded an element of flexibility from the project managers in the early stages. This has ranged from fossil discoveries in the proximity of the site forcing layout changes, to regulations forcing re-design of the towers. Maher Moussa, interior architect and material coordinator with Abyaar explains: "We had to make adjustments because of set-back regulations. The size of the plot remained the same, but the buildings became taller - from 32 to 44-storeys.
"We had to play with the regulations a bit - for example, when we did the re-design it was very costly, as it meant changing all the elevations. So it was like doing it all again, which is very expensive."
This was to ensure that the site does not appear cluttered and unplanned, he adds.
Construction of the villas is due to start next month and the aim is, according to Moussa, to have completed 70% of the villas by December this year. "The villas are in the mobilisation phase and we are waiting for the building permits. The next big step is to start the piling and shoring of the two towers."
Al Rashdan points out Abyaar's approach to launching these projects is unhurried to ensure no undue demands on the company, which it cannot deliver. "It is very important that we will only launch a project once it is under construction. When we launched Acacia Avenues in December, the infrastructure contractor had been onsite since October. And when we launched Pier 24 in September, we had already reached floor 15 or 16. That is our target, we don't want to launch something that can only be seen on a piece of paper or hasn't received approval. We don't want the risk - for us or our buyers."
At the beginning of this month, the company announced it had signed a home finance deal with Tamweel, which will see it provide home finance of 90% of the property value for a period of 20 to 25 years. Prospective buyers can ensure their place in the project for a down payment of 10%. Although, according to Al Rashdan, whether customers for Acacia Avenues will need any financial support is a moot point. "We signed an agreement with Tamweel and Dubai Islamic Bank, who will provide finance for the end users, but buyers for Acacia have private finance already. Villas of eight and 14 million is not expensive for this quality or location."
If successful, Al Rashdan says that Abyaar has plans to spin-out the concept to other countries in the Middle East, namely Saudi Arabia, Morocco in Africa and Oman. The company is also due to launch a major project at the end of this year in another prime Dubai location, although this will be more business orientated.
There is little doubt there is still appetite for such developments which target a particular Dubai demographic.
On release, Al Rashdan says that 40 villas were sold immediately and 70% of the apartments have been sold.
However, he argues that it is those who are showing foresight and anticipating where demand will be in the future who will succeed in Dubai's ever changing construction market.
"There is currently big demand in the real estate market in Dubai. If you launch any project, there are buyers because the demand still outstrips supply. But we think if the market slows - and I don't think that will happen until at least 2010 - you must remember two things: prime location and high-end brands. We want to build our brand with those brands which are on the market at the moment."