Nakheel’s ground-breaking auction to sell land at Jumeirah Golf Estates has set a new benchmark for the price of undeveloped land in Dubai - smashing previous records.
During the auction, which took place at the Burj Al Arab on November 29th, Nakheel sold the first three planned residential developments of the 13 that form Phase A of Jumeirah Golf Estates. The auction raised a staggering AED 160 million in revenue for the 850,000 square feet of land on offer - nearly AED 11 million over the reserve base price. The average price per square foot was set at a record-breaking AED 188.
Land was on offer to pre-qualified sub-developers who had met Nakheel’s vigorous criteria relating to financial, developmental and sales capabilities. The Sundials proved the most sought after plot raising AED 67.5 million at an average cost of AED 192 per square foot; this broke the previous record for undeveloped land price in Dubai which was previously set at AED 175 per square foot. Sienna Views also proved popular with bidders, fetching AED 55.3 million, while the smaller area of Orange Grove took an impressive AED 37 million.
Ms. Dina Al Jaflah, General Manager, Jumeirah Golf Estates, said: “We are delighted with the success of the auction. The demand for land at Jumeirah Golf Estates was extraordinary and we wanted to find a way of establishing the correct market value, while remaining transparent and open to all parties who had expressed an interest in the project. Due to the uniqueness of Jumeirah Golf Estates it was a very difficult product to determine market price; 75% of all properties will have absolute golf course frontage, with the balance facing lakes, nature strips and parks. The residential yield is also much lighter than anything currently on offer in Dubai at the moment and there are also no back-to-back plots.
“There is no comparable development in Dubai right now and because of the keen interest, an auction was the best possible way of determining a fair market price that developers were willing to work at. We had a good idea of what our top and bottom prices should be per square foot and it’s fascinating to note that the market has set the price exactly in the middle at an average of AED 188 per square foot - we were absolutely accurate with our assessment of the market.”
Statistically a large proportion of people wanting to buy property in a golf community are non-golfers; therefore, it is essential to have a range of other sporting and recreational facilities on offer for all residents. With this in mind, planning for Jumeirah Golf Estates has incorporated tennis facilities, swimming pools, gyms, wellness centre, commercial and retail centre, schools, medical centres, food and beverage outlets, and many more amenities.
Sultan Ahmed Bin Sulayem, Nakheel Executive Chairman, said: "Jumeirah Golf Estates will truly be an ‘amenitized’ community. Although the focus is obviously on the golf courses and the glorious open space that this provides for residents, provision has also been made for ‘open space corridors’ such as parks and public areas, as well as facilities and amenities for a diverse set of residents.
“During the planning process we discovered that the market is demanding far more from residential developments, and we firmly believe that our increased focus on facilities, in an evolving marketplace, is the true reason why the records were broken so easily. This is an important step for Nakheel and developers throughout the region.”
The auction was expertly hosted by representatives from world-renowned commercial and industrial property consultants Alliance Property Group who travelled from South Africa specifically for the event.
Roy Alderdice, Auctioneer and Managing Director, said: “It was indeed a great honour and a great privilege to conduct this very exciting and prestigious property auction here in Dubai. We are mindful of the fact that Nakheel could have chosen any one of the internationally recognised auction houses, and we are therefore most grateful for this appointment.
“The turnout today by such a large number of bidders bears testimony to the decision to sell by auction. For an auction to be truly successful it requires the following ingredients; all of which we had: quality properties, high demand, a unique property, a good price, and professional promotion and marketing. A new benchmark of land value has now been set by Nakheel for Jumeirah Golf Estates and we believe that this will be the beginning of many great things to come.”
The auction related to Phase A of Jumeirah Golf Estates, which occupies approximately 375 hectares of the northern section of the total 1,119 land parcel and includes the first two golf courses, Fire and Earth, both designed by golfing legend Greg Norman. Phase A will incorporate 13 planned residential communities, comprising around 1,000 individual properties, each set in beautifully landscaped surroundings with the average size of estates ranging from 6,000 to 12,000 square feet.
