Renting in Covid times — a developer in Dubai takes the test
FOR RENTAL MARKET, IT’S PROVING TO BE AN EXCRUCIATINGLY COMPLEX PHASE
Completing a residential project and then trying to lease it right in the middle of the Covid-19 crisis is far from ideal for any developer. But for Palma Holding, there were opportunities within this crisis situation.
“We completed Olivara Residences just ahead of the lockdown — that’s definitely the worst possible time to start leasing,” said Kareem Derbas, CEO. “But we still used the lockdown to do some [virtual] marketing and get the word out.
“And surprisingly, we managed to connect with some who were thinking of downsizing from living in a villa or a more premium location. That’s the tenant base we have been leasing to — those who want to downsize, but not downgrade their lifestyle.”
Olivara has some distinctive credentials attached to it — the four-building cluster in Dubai Studio City was designed by Hazel Wong, the name behind Emirates Towers as well as the Serenia Residences for Palm. It features one of the costliest penthouses in Dubai, at Dh55 million.
Luxury has leverage
Handovers have started at the first building, featuring one- and two-bedroom apartments that start from Dh55,000. There are 78 units, and these will be joined shortly by 50 in the second building, with handovers starting in July. The final two buildings will be ready by December.
Derbas is not taking anything for granted — but he reckons that affordable luxury will continue to have some sort of leverage in tough times as well. Olivara has Arabian Ranches, Motor City and Damac Hills to contend with in its immediate vicinity. Being in Studio City, the Palma project can target the professionals working at Virgin Radio, MBC or at Tecom, the
master-developer.
“On the freehold side, we believe it will take a good two years before all of that inventory with master-developers and private players get absorbed. During this time, I don’t think we will be making any freehold launches. The focus for any new project from us will be to rent and hold.”
(The Serenia at the Palm was the last freehold it did.)
20,000 new units were set to be delivered in the first six months of the year.