Kipp’s getting just a tad tired of the ridiculous things Dubai developers expect us to believe, like, oh let’s say 90 percent of The Torch, (the tallest residential tower) being sold prior to its opening.
Over the past month Kipp has written quite a few articles on the incredulously ridiculous things property developers in Dubai say. The fact our developer friends are in a serious state of denial is not exactly breaking news, in fact it’s probably getting rather old, so excuse Kipp if we bring you one last instance of our favorite brand of Dubai developer doublespeak, but we can’t help ourselves.
Before we let you know what we are on about, a little background. Earlier today, the local press reported that the tallest residential tower in the world is now ready for handover. The Torch is a 348-meter-high 86-storey residential tower at Dubai Marina. The tower features 676 apartments sold at prices ranging from Dh800 to Dh1,000 per square foot. The Torch is also a good 25 metres higher than the previous tallest residential tower (Q1 Tower of Gold Coast, Australia).
Are you impressed yet? Well, just wait until you hear what Rahail Aslam, chief executive officer of Select Group (developer of The Torch) told the local press. According to him, 90 per cent of the units in The Torch have already been sold: “Such an overwhelming demand at a time of downturn is for two reason. Prime location and sensible prices that are resilient, even in today’s market.”
Ninety percent already sold – now you’ve got to admit that is impressive, but Kipp can’t help but be reminded of reports from Emaar prior to the inauguration of its splendid Burj Khalifa claiming that approximately 90 percent of its apartments were already sold.
It later emerged, 10 months after the Burj Khalifa had opened, that not only had rents and prices dropped by 40 percent, but only eight percent of the tower was occupied – meaning 825 of the 900 apartments in the Burj Khalifa was still vacant.
And, even if we were going to pretend to forget Emaar’s troubled tower, we can’t help but recall the findings of JLS’s Q1 2011 report of the residential market in Dubai, which found that counting the 7,900 units being completed in Q1 2011, the residential stock in Dubai stands at something like 317,000 units. But wait, add to that awesome figure an additional 20,700 units which are expected to be completed by the end of this year and you probably see where Kipp’s going with this. We couldn’t put it any better than our friends at JLS, who remarked “Although there are pockets of stabilisation within Dubai’s high-end residential sector, the overall residential market will continue to experience a situation of oversupply and prices are expected to decline further over the remainder of 2011.”
So, as much as Kipp wants to believe the property market has recovered and there is high demand for apartment towers such as The Torch, we can’t help but think the over-supplied saturated market is not going to get any better any time soon. We just wish developers would drop the act and admit it too.