Luxury properties in Dubai are in high demand, a fact made evident with the latest leased deal for a residential property at Palm Jumeirah.
A four-bedroom penthouse at the iconic man-made island secured a whopping Dh1.7 million rental deal for a year, as the tenant does not want to miss out on the Omniyat One on Palm Jumeirah, one of the most exclusive residential projects in Dubai.
Metropolitan Premium Properties (MPP), a full-service real estate agency and the Metropolitan Group’s flagship property company, closed this one of the biggest single-unit rental deals in Dubai this year.
In November, a villa on Palm Jumeirah was rented on a six-month basis for Dh4 million. On a year-long tenancy this would equate to a record-breaking Dh8 million, surpassing the previous record of Dh7.5 million set by a villa in Emirates Hills in 2021.
Aleksandr Mylnikov, sales manager at Metropolitan Premium Properties, said 4,790-sqft penthouse was one-of-its-kind option available at the building.
“The four-bedroom penthouse was in high demand despite the high-rental fee because it offers incredible views at Palm Jumeirah. The transaction was concluded quickly as I represented both the landlord and the tenant,” he said.
One at Palm Jumeirah is located at the track of Palm Jumeirah. It is a new exclusive premium residential complex by Omniyat with a limited series of 94 exceptional residences managed by Dorchester Collection.
The ultra-luxury development was built, designed, and crafted by award-winning firm Soma Architects. It offers three and four-bedroom apartments with modern amenities and incredible views of the Arabian Gulf.
“We are seeing increasingly more and more inquiries for similar high-end units that overlook the Dubai skyline and the Arabian Gulf,” Mylnikov said.
TIGHT SUPPLY, HIGH DEMAND
There is a high demand for luxury properties in Dubai as high net worth individuals (HNWIs) and millionaires are ready to pay record prices or high rental fees due to a shortage of top-notch residential villas, penthouses and apartments.
In 2023, only 30,000 new homes are expected to be delivered, including in townhouse and villa communities, and this has had a knock-on effect on the most popular areas to rent in Dubai.
While many areas are still well below their highest 2014 peak values, prime areas, including Palm Jumeirah and Emirates Hills are expected to increase in rent the most in 2023.
BIG TICKET DEALS
The penthouse rental deal follows a spate of big-ticket agreements this year including a penthouse that was sold for Dh410 million on Jumeirah Bay Island and a three-bedroom apartment at Bulgari Resort and Residences for Dh13,543 per square foot – the highest per square foot price for a property sold in Dubai.
Palm Jumeirah is the most sought-after address for ultra-high net worth individuals (UHNWIs) who are investing in Dubai’s uber-luxury property market, according to a study released by a luxury property consultancy penthouse.ae.
“The most sought-after island accounted for 30 per cent of Dubai’s real estate deals in the Dh20-million plus luxury property market segment in 2022,” according to the luxury property consultancy.
The average asking rent for an apartment in Palm Jumeirah is over Dh248,092 ($67,600) per year, with a villa renting for Dh1,012,920 ($276,000) annually, according to real estate consultancy CBRE.
Analysts attribute the growth in Dubai’s luxury market to the wealthy fleeing pandemic restrictions elsewhere. Real estate now contributes around 10 per cent to Dubai’s overall gross domestic product. After a slowdown due to Covid-19 restrictions, Dubai saw 86,849 residential sales in 2022, beating a previous record of 80,831 set in 2009.