Site visit: Mohammed Bin Rashid City, Dubai
Construction is progressing at a steady pace within the $10bn Mohammed Bin Rashid City master development, an ambitious project by Meydan and Sobha.
The huge freehold Mohammed Bin Rashid Al Maktoum City District One project, located within the Mohammed Bin Rashid City master development, has attracted healthy investments, partly because of its convenient location and partly because of the reputation that its developers carry.
The project, off Al Khail Road, is in close proximity to Downtown Dubai and Business Bay, with the Burj Khalifa and the Dubai Mall being about 4km away. The master development also has access to Sheikh Mohammed Bin Zayed Road and the Dubai-Al Ain Road.
At a media gathering last month, the management of Meydan and Sobha, the developers who have entered into a 50:50 joint venture to build the $10bn (AED2.72bn) development, revealed that construction of the 267 sold-out villas in Phase 1 is on track, and will be handed over to buyers by mid-2016. The villas in Phase 2, most of which have also been sold, are due for delivery sometime in mid-2017.
“You cannot repeat this project in this country. There are numerous villa projects in Dubai, but ours is right in the heart of the city,” commengts PNC Menon, founder and chairman of Sobha Group.
The ‘super luxury’ District One project is spread over 440 hectares, with more than 60% of the total area being allocated to green and open spaces. The low-density project boasts a 7km-long ‘Crystal Lagoon’ for swimming, kayaking and other activities, and is expected to be delivered in mid-2017 along with the Phase 2 villas. The project will also feature 14km of artificial beach walk and 8.8km of cycling and jogging track on the periphery.
Menon mentioned that out of the 631 luxury villas that were released to the market, 511 have already been sold. “One third of the total project is currently sold. We have seen a good mix of buyers from around the world. They are very happy with the location,” he states.
Meydan Sobha is building the project, without any external financing, under its in-house brand, MS Construction. “We are doing the construction ourselves, so we have total control on the quality and time. We don’t believe in subcontractors,” Menon declares. However, Wade Adams Contracting has been appointed as the infrastructure contractor by the developer.
About 4,000 workers are currently engaged on-site in construction activity that currently totals three million man hours. The developers eventually plan to increase the number of workers to 7,000 to boost building activity.
The project will comprise a total of 1,500 residential villas, all of which are being offered in three architectural styles: Arabic, Mediterranean and Contemporary. Villas start with the basic four bedrooms, with an area of 569 sq m, and go up to eight bedrooms. All villas come with swimming pools and a maid’s room and offer uninterrupted views of the Dubai skyline, particularly the Burj Khalifa.
The prices start at $4.2m (AED15.5m) for a four bedroom villa. “We are currently selling at $680 (AED2,500) per sq ft for regular villas and $735 (AED2,700) per sq ft for waterfront villas,” Menon said. He added that the four and five bedroom contemporary villas are the most popular among buyers, with four beds all sold out.
Customers of 52 regional and global nationalities have so far bought properties in the master development, Menon claims. “The first set of buyers are primarily Indians,” he remarks, adding: “The second most prominent group of buyers are the Saudis. Then we have other regional nationalities like Qataris, Kuwaitis, Iraqis, Iranians, as well as British expats buying in the project.”
District One will feature entertainment, retail and hospitality offerings, to be developed by Meydan Sobha. The developers are in negotiations with international retail brands and hotel operators for the project.
To add to the existing portfolio of the project, the developers are also expected to announce plans for Phases 3 and 4 after incorporating some ‘minor changes’.
Meydan Sobha has appointed several Islamic and non-Islamic banks to offer mortgage finance to its customers. “We have a number of banks already participating with us. They include Abu Dhabi Islamic Bank (ADIB), Noor Islamic Bank and Emirates NBD,” Menon says.
Presently, the banks are offering up to 50% of the total property value in loans and that percentage will go up as construction of the project nears completion, he states.
The company is working on its marketing campaign, which is expected to be revealed soon.
But Menon claims that the project doesn’t need marketing – it speaks for itself.
“No, we are not facing any challenges in developing with Meydan Sobha,” Menon exclaims. “I have been in the real estate industry for 46 years now. I have never developed anything that is below par. My whole life I have been working on spacious homes and high-end apartments. There are no challenges and we are on track.”
According to a recent research paper by Standard & Poor’s, titled Inside Credit: The UAE’s Property Market Is Prepared for the Current Correction, a 10% to 20% downward ‘correction’ in the UAE’s real estate market is expected after three years of sharp price appreciation, but it “should be nothing on the order that led to the Dubai crisis in 2009”.
Menon believes Dubai’s property market is currently enduring a bearish phase, and transactions in the market have declined: “We have been in the real estate business, in Dubai and overseas, for many decades. What goes around comes around – it’s a cyclical business,” he concludes.