A tree grows in Dubai - and it's hot property

PUBLISHED : Wednesday, 16 March, 2005, 12:00am
UPDATED : Wednesday, 16 March, 2005, 12:00am

The Gulf state wants Asians to invest in the so-called eighth wonder of the world

Two years from now, passengers flying into Dubai will be greeted with the spectacular sight of a giant green palm tree growing out into the deep blue ocean, its symmetrical branches topped by an over-arching crescent of green.

Already being described as the 'eighth wonder of the world', the tree and the crescent are part of a giant reclamation project under construction and, when completed, it will contain some of the most expensive properties in the world. The project bears the name Palm Jumeirah.

The groundwork on what engineers claim is the world's largest manmade island has been completed, and the buying and the selling have already begun.

As Dubai is busily building on its ambitious plan to become a regional financial hub, like Hong Kong and Singapore, real estate players in the Gulf emirate (population 1.5 million) are tapping investors in Hong Kong and other parts of Asia.

'Dubai real estate is the hottest destination in the world to put your money into property at the moment,' said Mike Bridge, regional sales director with Dubai Shows. 'There is no other city in the world where the value in property is rising as fast as it is in Dubai.'

Mr Bridge, who was in charge of the first Dubai property show in Hong Kong, held last weekend, said Asia was still very much 'new territory' for the Dubai market, where prices had been climbing rapidly since the property market opened to foreign investors in 2002.

Dubai has been experiencing extraordinary economic growth in the recent past. Its gross domestic product grew 17 per cent last year, and is expected to grow 10 per cent this year.

The Palm Jumeirah is being touted as an eye-catching luxury residential project and an icon for high living. Early celebrity buyers who will have homes on the island include soccer megastars David Beckham and Michael Owen.

Kit James, sales director of IFA Hotels & Resorts, the single biggest investor in the Palm Jumeirah, said: 'It is a totally tax-free market where investors can come and go without restriction.

'The government is extremely keen to get foreign investment in Dubai.'

Mr James believes Dubai is the next logical stop for Asian property investors. He said the company was considering whether to set up an office in Hong Kong.

Investors in Dubai property were expected to make an annual profit of between 10 per cent and 45 per cent, he said.

All 780 luxury apartments at the flagship Golden Mile were snapped in 48 hours when the project opened for sale in May. Since the project's launch, prices have jumped 60 per cent to US$320 per square foot.

The Golden Mile is part of the trunk of the Palm Jumeirah, and will contain retail shops and residences.

There is no general index to track property prices in Dubai, but Middle East media reports suggested that more than 80 per cent of the apartments sold last year were purchased by speculators.

Mr Bridge said: 'Buyers were even camping outside the office to buy.

'It's not uncommon to see a single buyer purchase 10 villas and 30 apartments. You can sell the apartments even before they are built.'