Property hot spot
- 5 May 2008

In stockbroker belts around England, Sunday afternoons at the in-laws have become rather strained of late. As the credit crunch and fears of a recession place extra stress on the middle-class purse, reports that David Beckham handed the keys of his waterside Dubai home over to his wife’s parents were received with shock, bordering on intense envy.

What a gift! A marble-floored villa, jutting out into the warm waters of the Arabian Gulf on one of the green fronds of Dubai’s man made Jumeirah Palm. It certainly outpaced the usual bunch of flowers that most favoured in-laws can expect from the partners of their darling daughters.

But it wasn’t just the immense generosity of the gift that drew a gasp but the realisation that the villa, priced at Dh5.8 million (£800,000) when Beckham took possession in 2002, is now worth a whopping Dh58m. It must have been the property investment of the century. But the Beckhams are not the only Brits who have been creaming off the profits of Dubai’s building programme.

Nadeem Ali was born in Leeds andnow lives in the emirate and sells property to UK-based investors.

Asked about his move he says, “I went on holiday to Pakistan and made a stopover in Dubai on my return.” It was love at first sight and within months he had moved.

“No taxes, no crime and sunshine 12 months of the year? Yes, we are very happy,” he chuckles.

We met during one of his stop overs in London where, with 20 other salesman from ACW Holdings, he was selling a piece of the Dubai dream with a video, glossy brochures and four giant models, which looked like they had been given leave from Legoland, jaunty stick people pacing the paths under mini plastic palm trees.

They were selling off-plan two developments – both in the soon to be thriving Dh7 billion Arjan district of Dubai. One was offices in a commercial tower to be named “The Light” and the other a hotel called “Platinum One”. Not one brick has been laid but Ali promised they would be up and running in two years time.

“Hotel and office space is at a premium and we expect both to have over 90 per cent occupancy,” Ali said. According to the brochure, UK investors can pay Dh500,000 for one “luxury” “state-of-the-art” apartment and expect to look forward to a return of Dh240,000 per annum once the block is built. Underlining the appeal for overseas investors rather than expatriates, the deal also works as a kind of haute timeshare, offering owners the chance to use the place for four weeks of the year.

But he doesn’t expect the mixed bag of middle-aged Londoners milling around his exhibition to hold on to their property for long enough to holiday in. “Most off-plan investments are sold on several times before they are completed.” He tells me that I could expect a return of 12 to 15 per cent on my investment compared with 4 to 5 per cent on a London property.

As property prices wobble in the West the golden cookie being presented by developers in the Emirates is looking ever more attractive. There are dozens of agents and investment companies selling the Emirates around the world. In Britain, they have recently been joined by one of the country’s most established property consultants Strutt & Parker. Think Strutts and you think of Wiltshire estates, Devon farms, Surrey manors and prime London property, not sea, sand and year round sunshine. Time to think again. They have teamed up with Jasper Capital Ltd, an international corporate financial and management consultancy specialising in the region. The new partnership, formed in February this year, has its head office in Abu Dhabi and a subsidiary office in Dubai.

“We have been travelling to the Gulf States for the past seven years and now we are here to stay,” said Andrew Yeandle, chief executive of Strutt & Parker Middle East. They are ready to do business in both directions investing for their clients both in the UK and in the Middle East.

Yeandle has been impressed by Plan Abu Dhabi 2030 Urban Structure Framework which was launched last year. “Abu Dhabi has watched Dubai and learnt from what is happening there,” he said.

His new business partner Jason Peers continues, “Dubai is Miami without the crime, Abu Dhabi is different.” Adding, “If the development potential is fulfilled it will be fantastic, they have thought of everything in terms of lifestyle and infrastructure.”

Property moves so fast that despite being in the game, Peers has been so busy building his international business that after two years he is still in a rented flat. “I have just about closed a deal on buying – off plan – a property on Reem, but ultimately we would like a home on Saadiyat.”

Meanwhile he is trying to rent a house. “There is so little good rental stock that my wife and I need to spend a concentrated month just chasing down a property. Rumour has it that there are agents following agents in the fight for property.”

Traumatic for those hunting for somewhere to live, no doubt, but for UK-based investors looking at a sluggish market back home, it all bodes well.

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