There is only so long that oil will fuel Dubai’s wealth, a message repeatedly reinforced by His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai. And so, nearly 20 years ago, HH Sheikh Mohammed decided that Dubai would become one of the world’s premier tourist destinations, in a bid to make the city a more sustainable economic power for generations to come.
Construction began on the world’s largest man-made island back in 2001, with the first homes handed over in 2006, and today the Palm Jumeirah spans five square kilometres, adding 78 kilometres to Dubai’s coastline. The numbers behind the engineering development of the Palm Jumeirah are, quite frankly, staggering.
A constantly changing Palm
It has been more than ten years since Nakheel handed over the first set of residences to homeowners on the Palm, and, like the rest of Dubai, the island has had a constantly changing face. It was built for luxury, and is home to some of the region’s most expensive properties, hotels and leisure locations.
But few spots on the island development seem to capture the imagination of visitors (and all those relatives back home) quite as squarely as Atlantis The Palm, a five-star resort home to celebrity chef-helmed fine-dining restaurants, nightclubs, private beaches and an enormous waterpark. It boasts hotel rooms costing thousands of dirhams per night – including an underwater one – while the most expensive, the Royal Bridge Suite, has a rack rate of US$25,000 (about Dhs92,000) per night, and hosted Robert De Niro on the evening of the hotel’s firework-strewn, celebrity-packed opening gala. And even it isn’t satisfied, with construction of the staggering, sprawling Royal Atlantis Residences & Resort rapidly gathering pace next door, and scheduled for opening some time in the third quarter of 2019.
Across the Palm, further initiatives are taking place to ensure the archipelago realises its five-star potential. No neighbourhood in Dubai worth its salt could be considered complete without a mammoth shopping complex, and Nakheel Mall is currently half-way through construction in the heart of the archipelago, promising 4.5 million square feet of retail space across five levels, 350 shops, restaurants, leisure attractions and, most notably, a St. Regis hotel built right into The Palm Tower, a 52-storey tower alongside the mall. Scheduled for completion in 2018, it boldly claims that it will transform views of, and from, the Palm.
Down on the western base of the Palm there’s a new strip of hotels currently in various stages of development. Following the Fairmont’s arrival back in late 2012, it quickly found itself with neighbouring resorts being developed, including the arrival of the hotly anticipated Viceroy in March. The opening of Viceroy is due to be followed by not only more hotels – including a Hilton and the slightly more affordable Byblos (completion dates to be announced) – but also a boardwalk pedestrianising the beach area facing out to the Ain Dubai development, scheduled for completion early next year.
While the development of the boardwalk will have a short-term impact on beach access for guests at the Fairmont and neighbouring hotels, long-term, it promises a more complete vision for the trunk of the Palm complete with new food and beverage outlets.
On the east side, at the top of sprawling private beaches belonging to the Shoreline complex, sits Club Vista Mare – one of the latest and most successful new complexes to launch on the Palm in recent years. Hugely popular since opening in September 2016, it houses a diverse line-up of restaurants and bars, as well as access to the shores of the Arabian Gulf. You’ll find beach bar Breeze; craft hops specialist bar The Tap House; Simply Italian; traditional Arabian restaurant Abyat; Peruvian-Japanese spot Ají; premium seafood joint Ibn AlBahr; and finally Gursha, the first Ethopian restaurant in the area.
Simon Townsend, director and head of valuation and consultancy at real estate advisor CBRE Middle East, says the completion of Nakheel Mall and The Pointe – a retail and entertainment complex set at the tip of Palm Jumeirah’s trunk, across the bay from Atlantis The Palm – will see the realisation of yet more of Nakheel’s early ambitions for the island.
“The Palm has long been credited with being one of the catalysts for Dubai’s global real estate reputation,” he says. “Construction has been ongoing continuously, whether it’s the completion of planned hotels or the delivery of residential units. These completions, coupled with the enhancements of the crescent, through the boardwalk, have added to the demand for both The Pointe and the anticipated Nakheel Mall.
“The Palm, through its hotels, already has a reputation as being one of Dubai’s main dining and entertainment hubs; and the delivery of both of these will not only further enhance this but also provide the much-needed commercial infrastructure for the growing residential population and tourism numbers. Previous infrastructure initiatives, such as the Monorail, which have been widely underutilised, will now potentially provide an additional passenger movement system to maximise footfall to the malls without placing further burden on the roads.”
The potential for increased pressure on development’s road infrastructure and congestion levels is one that needs to be carefully strategised when considering ongoing residential development. Property management firm Asteco’s Q1 2017 Dubai market report revealed that 3,600 new apartments opened up on the Palm in the first quarter of 2017, a figure that will rise to more than 17,000 by the end of the year.
For argument’s sake, if there is to be another 20,000 new Palmies arriving on the island in the next six months, there’s going to be a pretty hefty strain on the roads, so alternative transport methods and optimised traffic flow is going to be essential in the very near future. The rent issue
Over the past year there has been plenty of talk about the shrinking cost of rent in Dubai. Some stats suggest that rents are continuing to tumble towards their nadir at an increasing pace, while others suggest the dip is beginning to plateau. So what’s really going on? According to Lukman Hajje, CCO of Property Finder, the market-tracking and listings firm, the market is continuing to soften across the UAE. “Prices have been slowly declining since the mid-2014 peak,” he says. “With few exceptions, most communities have again witnessed modest declines over the past quarter. Price declines have been more significant in two distinct categories. The first consists of new and emerging communities where new stock has come online, therefore dragging down rental prices. New launches have further weakened sale prices within the second market, which is the top-end segment, i.e. properties above Dhs10 million for sale and Dhs350,000 for rent. Qualified prospects are fewer in number in this category, so price declines tend to be more dramatic. The Palm Jumeirah certainly falls into the second category.”
Hajje believes that the current strength of the dirham against global exchange rates is forcing foreign investors to look further afield at international markets with more competitive rates.
“[But] There are a number of elements at play causing downward pressure on prices,” he says. “Despite the fact that sale prices are reportedly at a three-year low, this is one of the few segments in the UAE market where bank valuations are at times coming in below the sale price.
“UAE Mortgage Cap restrictions for properties above Dhs5 million stipulate that a borrower must have a minimum deposit of 35 percent, which has further compounded the issue. For these reasons, buyers in this segment therefore tend to be cash-orientated. And with the dirham at historical highs against the pound sterling, euro and Russian ruble, traditional Palm Jumeirah expat buyers have many attractive options around the world to weigh against their Signature Villa or Oceana penthouse. Some Palm owners are cashing out and taking advantage of the favourable exchange rates while they can.”
Stats provided to Time Out Dubai by Property Finder indicate that the average selling prices of properties on the Palm have fallen nearly 5.5 percent in the past quarter alone. Over the past six months, that figure increases ten percent, although broadly speaking, the stats can be misleading. The majority of the decline is down to a 43 percent drop in the price of bulk sale units in Q1 2017.
Conversely, the cost of whole buildings, townhouses and penthouses have risen by between five and 16 percent. Apartments and villas, the most populous property types on the Palm, have plateaued, and represent a less than two percent decline in value quarter on quarter.
The good news for renters looking at the Palm is that the average yearly cost for an apartment has drifted downwards in the past nine months – down from Dhs190,000 in Q2 2016, to Dhs175,000 in Q1 2017.
With the scope of projects ongoing on Dubai’s most famous landmass, and with rents coming down, now might just be the time to hop on board.
The making of an island
Nakheel, the government-owned developer responsible for the Palm, began with developing an 11.5km-long breakwater – now recognised as the crescent surrounding the fronds, and home to Atlantis The Palm. Underneath, rocks weighing up to six tons each lay the foundation for anti-erosion-treated sand, which prevents water degradation from decaying the landmass, while protecting the structure from changing tides. Meanwhile, construction of the Palm itself involved reclaiming land out of the Arabian Gulf – and lots of it.
More than three billion cubic feet of ocean sand forms the structure of the base and fronds. GPS mapping systems plotted the shape of the Palm to ensure accurate construction – so much so that land was successfully placed to within half an inch of its intended location. High frequency vibration technology increased the density and stability of the sand at the Palm’s base, making its platform sturdy, resilient to future construction and capable of withstanding changing water conditions.
Allowing for sand to settle to such an extent is a process that usually takes millions of years, but with vibro-compaction technology it’s claimed the sand won’t shift any more than one inch over the next 50 years.
The Palm Jumeirah is perhaps the most ambitious of HH Sheikh Mohammed’s plans to come to fruition so far. But the work is only part-finished on broader initiatives – the Palm Jumeirah forms one third of a plan to create three man-made archipelagos across the Dubai coastline, with additional Palms at Jebel Ali and Deira initially intended to dwarf the Palm Jumeirah.
However, while land reclamation and construction on the Palm Jumeirah took roughly six years to complete, progress was far slower up at Deira, and in 2013, Nakheel put plans for Deira Palm on hold before reclamation of the trunk and fronds was complete. Development of the base was reimagined, becoming instead the Deira Islands Boulevard, a Dhs5 billion project spearheaded by Nakheel, and will surround the soon-to-be-built Deira Mall.
Further down the coast from the Palm Jumeirah sits the Palm Jebel Ali, another project that has seen the plug temporarily pulled, owing to the global financial crisis of 2008. It remains a long-term project that will be completed, although a specific time frame has not yet been confirmed.
New Palm Jumeirah haunts
Club Vista Mare
Since opening after summer 2016, this family- and pet-friendly strip of restaurants and bars has gone from strength to strength. It is, in short, everything the Palm has needed since it first launched – a variety of different cuisines at a range of different price points, a relaxed setting and delightful views of the beach and sea from every outlet. Try Tap House and Breeze for drinks, Ibn AlBahr for Lebanese seafood, Ají for Nikkei cooking and Gursha for an introduction to Ethiopian cuisine. Next to Tiara Residences, at the end of Shoreline Apartments.
Great British Restaurant Now open at Dukes Dubai, this rather directly named eatery has a heavy focus on classic British cooking. Think coronation chicken, fish and chips, and jam roly poly. Dukes Dubai (04 455 1101).
Kyo Restaurant & Lounge This smart, sleek Japanese restaurant and bar opened in late 2016, bringing with it a menu spanning funky fusion breakfasts (the benedikuto is described as “seaweed muffin topped with smoked salmon, poached egg and Japanese sabayon shichimi togarashi”) to classic robata dishes and sushi. Golden Mile (04 557 5182).
One of the newest spots on the Palm, located right at the base of the trunk, this small Italian trattoria has already won us over. Pizzas are beautifully crisp and very reasonably priced (and pair perfectly with a cold drink), and with tables right at the water’s edge, it doesn’t get much more island-like. Azure Residences (04 568 3137).
Viceroy Palm Jumeirah Dubai
The arrival of Los Angeles luxury lifestyle export Viceroy was one of the most hotly anticipated hotel launches on the Palm. There are a wealth of new places to try here, so head to the west coast of the trunk. West trunk, www.viceroyhotelsandresorts.com/en/dubai (04 455 9999).
Dhs175,000 Average rental price of an apartment
Dhs450,000 Average price for renting a villa
Dhs3,000,000 Average apartment selling price
Dhs 14,000,000 Average villa selling price
3 percent reduction in apartment rental cost in Q1 2017 compared to Q4 2016
5 percent reduction in villa rental prices in the same period
What the residents say
Sally, 30, UK “I’ve lived on the Palm for five years. It’s changed so much. I love that it’s very dog-friendly – dogs are welcome at Barrel 12, Club Vista Mare and Sun& – and the running track is cool. I also love that once you cross over the bridge for the weekend, you don’t actually have to go back to mainland. It has a really nice community feel. Because there’s so much construction work now, if you’re trying to get off the Palm after 5pm you get stuck in about 20 minutes’ worth of traffic for a 100-metre drive. With the Mall going up, it’ll be interesting to see how the traffic will be affected. Everyone thinks everyone on the Palm has beach access. We’ve got a good pool and a place to stick the boat, so that’s cool, but very few places actually have access to the beach.”
Julia, 33, Russia “I’ve lived on the trunk of the Palm for just over five years. It has drastically improved in that time with the opening of the Golden Mile Galleria and Club Vista Mare. The Palm is a fantastic place to live. Many apartments have some kind of sea view and now there’s a great array of bars, restaurants and beach clubs. The only downsides to the growth of the Palm are the traffic and lack of pedestrian links to the amenities. Hopefully the pedestrianisation project will alleviate both of these very soon.”
Damian, 32, UK “If I didn’t have to leave the Palm to go to work every day, I probably wouldn’t ever leave. I moved to the Palm in 2011 straight from London, and while back then it didn’t have the facilities it boasts today, it was still a fantastic place to live. It remains spacious and there’s a running track in the centre between Shoreline and Golden Mile. There are shops, cafés, restaurants and bars – such as Bidi Bondi, Beach House Cabana, Barça and of course the new strip down at Club Vista Mare. It’s perfect for single people and great for families and has some of the most idyllic views in the city.”