Dubai and a gilt-edged investment

An emerging property market in this desert state means a chance for British purchasers to get in on the ground floor. And the government is backing investment in one project with the promise of a kilo of gold for every buyer. Ginetta Vedrickas reports
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The Independent Online

Most Britons buying property abroad choose Spain or France, with the more daring opting for Florida, Portugal or Cyprus. Visitors to any property exhibition will find all of these countries well represented but, recently, areas previously unknown to the overseas' homes market are emerging, and Dubai is now the latest corner of the world to attract British buyers.

Most Britons buying property abroad choose Spain or France, with the more daring opting for Florida, Portugal or Cyprus. Visitors to any property exhibition will find all of these countries well represented but, recently, areas previously unknown to the overseas' homes market are emerging, and Dubai is now the latest corner of the world to attract British buyers.

UK-based niche property developer Martin Jordan has several friends who have opted to buy in this Middle Eastern country, known more for its oil fields than its property market: "They keep telling me that it's the new Caribbean, but better. Apparently it has fantastic beaches, wonderful weather but, unlike many parts of the Caribbean, they are also swayed by the idea that it is very safe."

These were all considerations which appealed to former air-cabin-crew member Wendy Entwistle, who is awaiting completion on a two-bedroomed apartment in Dubai: "I lived in the country for six years and it really is the most wonderful place. I've come back to the UK for a year, but am looking forward to returning to the flat which will be my family home."

Entwistle is a first-time buyer who has not been able to get onto the UK property ladder and she believes that she has now missed the boat in Britain: "I tried to buy at first here in Manchester, and then at Lytham St Anne's, but wasn't able to and I've now realised that I've left it too late."

Entwistle has chosen instead to invest in Dubai's property market and recalls feeling "very excited" on discovering that properties were available at the exclusive Palm Terrace development, a 12-storey building at the centre of the shoreline, on the world's largest man-made island, The Palm: "I couldn't believe it. Back in Dubai, which is like living in a small village, the gossip was that this development had already sold out, so when I went to a property exhibition here in Manchester and discovered that Damac was marketing these properties I was really excited and decided to buy."

Damac Properties say Dubai's real- estate market is experiencing a major property boom, in spite of the recent war in Iraq. Damac has not been deterred from adding property management to their string of activities, which include catering, manufacturing and financial services. The conglomerate now employs over 4,000 people and is about to open its first UK office, in Manchester. Damac's UK representative, Immy Suleman, says that buying at Palm Terrace gives buyers the chance to live at "the world's most envied address" and credits a "determined government's vision" for the project. This month sees the launch of Lake Terrace at Jumeirah Island, a 40-storey high development of one-bedroomed studio apartments which will be for sale at £49,000. "This latest development is very western in terms of design, with lots of glass and steel," he adds.

Suleman believes that Lake Terrace will attract further British investment into Dubai: "It is a totally new market. Foreigners have only had the chance to buy there for the past two years, and we've sold to some very high-profile clients, including lots of footballers. Many are buying for investment, and some as second or third holiday homes."

Completion of Palm Terrace is set for late 2005 and the government is backing the project in a unique way, by promising to throw a kilo of gold into the sea on the adjoining private beach for every buyer who signs on the dotted line. Properties range from £151,000 for a one-bedroom apartment of 1,173sq ft, up to £245,000 for a three-bedroom apartment of 2,152sq ft. All apartments have balconies with water views, along with hi-tech kitchens, state-of-the-art security systems, and "future technology ready" features installed.

For a nominal fee, residents will have access to five health clubs which "along with fantastic shopping" is something that Entwistle is eagerly awaiting, although she won't stay in her apartment in high summer: "Temperatures are at uncomfortable levels then, but for Britons, Dubai is an ideal winter destination where you can play golf, sail and do all kinds of water sports."

Peter Cooper, editor in chief of Middle-Eastern countries' news service, AME Info, has also bought in Dubai and says: "It is an excellent idea for UK expatriates living here who intend to stay at least five years. For other investors, Dubai property is worth considering as a long-term investment. At least the property is cheap, at £600 pounds a square metre: that's a quarter of the cost of buying in Oxford, and the growth prospects for Dubai are excellent."

Cooper has noticed a new wave of investors in the country, particularly now that the situation in Iraq has eased, and he anticipates an imminent spate of deposits by investors "whose nerves weren't quite up to the first projects". But he would like to see an urgent reform of Dubai real-estate law to clarify the ownership status of foreigners which he believes represents a "modest" risk: "You have to watch the legal side of freehold, although I note that this week the registration of Palm Island property is starting at the Dubai Land Department."

Cooper believes Dubai may well echo the early days of property investment in Hong Kong or Singapore, where investors benefited hugely but adds: "Land supply is unlimited, so it might be more like the US." He also warns that emerging markets can face ups as well as downs: "Not every property in will be a sure-fire investment. But the foundations of a healthy market are being laid."

Damac Properties: 020-8518 2591, www.damacproperties.com immy@damcgroup.com; w ww.ameinfo.com. The next Homes Overseas exhibition will be at Birmingham NEC, 5-7 Sept, www.homesoverseas.co.uk

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