Palm Jebel Ali gains interest from long-term investors

The Palm Jebel Ali project will play a significant role in maintaining the rally in Dubai’s property market in the coming years, especially due to the limited supply of prime sea/waterfront properties in the market.

Property experts say that investors are selling their units at premiums of up to 10 per cent to cash in on the gains following the three-year rally in the local property market. Following the success of Palm Jumeirah, Palm Jebel Ali is billed to be one of the next big destinations sought after by millionaires and billionaires in Dubai.

In September, Nakheel, the developer behind the Palm Jumeirah and Palm Jebel Ali, launched villas with a starting price of Dh18 million. Following a strong demand, the Dubai-based developer released the second set of villas.

Currently, 10 fronds have been released on Palm Jebel Ali, identified by titles from Frond A to J. This contains approximately 1,200 villas and more fronds and villas are expected to be made available.

According to Nakheel, the entire project is projected to be fully completed by 2027 and will encompass more than 80 hotels and resorts, as well as a variety of residential, commercial, and entertainment options.

Some people are considering it as a future residence, but for most, it's about potential capital appreciation given Dubai's growth. There’s a lot of hope for investors.

With areas such as Palm Jumeirah ageing, investors see newer communities as this, the next big thing in that direction.

In terms of geographical performance, Mayed Al Rashdi, research analyst at Emirates NBD Research, said Palm Jebel Ali stood out as the top-performing area in terms of sales value in Q4 2023, generating Dh14.2 billion. Dubai Marina followed in second place with Dh8.3 billion, while Business Bay came in third with Dh5.1 billion.

“In the prime villas sales segment, Jumeirah Islands and the Palm outperformed their peers in 2023 with a surge in prices of 33 per cent year-on-year and 36 per cent year-on-year in December, respectively,” Al Rashdi said in a note.

Farooq Syed, CEO of brokerage firm Springfield Properties, said landmark developments like Palm Jebel Ali are pivotal in catalysing Dubai's off-plan market dynamics as they are recalibrating market expectations for the luxury villa segment, establishing new pricing paradigms that are set to become the benchmark for luxury and strategic urban planning.

“Palm Jebel Ali stands at the forefront of this shift, embodying a blend of luxury, innovation, and sustainability meticulously designed to meet the standards of today's global investors. With Dubai's real estate sector registering Dhs35 billion in sales in January 2024, and off-plan sales witnessing a 25 per cent year-on-year growth to approximately Dh15 billion from Dh12.2 billion in January 2023, it's clear that developments like Palm Jebel Ali are shaping the future of luxury living. This trend is not just transforming the Jebel Ali district but is also a testament to Dubai's position as a top destination for high-end investment,” said Syed.