Real Estate

Apartment prices rise on news of Dubai Creek Tower revamp

October 31, 2023, 10:42 AM

Redesign for world’s tallest building
Homes with a view add 10%
Construction targeted for 2024

The price of Dubai apartments with a view of what is intended to be the world’s tallest building have risen by nearly 10 percent since the project’s redesign was announced in August.

Property developer Emaar hopes to start work on the revamped $1 billion Dubai Creek Tower next year.

Sidharth Kumar, a real estate agent at Valcom Properties, said that prices in “non-prime” communities such as Al Jaddaf and Dubai Healthcare City Phase Two which are near the tower have surged since news of the redesign.

“People started to get greedy after the news hit the market,” he told AGBI.

“Owners who were just about to sell their apartments in the Al Jaddaf area backed out of deals. Now they are either not interested in selling, or quoting higher prices.”

Dubai Creek Tower was initially announced in 2016 and due to be completed in time for the Dubai Expo in 2020.

Foundations for the tower were completed in 2017 but economic growth in the UAE slowed in that same year after crude prices fell by more than half, causing developers to put several projects on hold. Little progress has been made since.

Emaar Properties founder Mohamed Alabbar announced in August that the tower, the planned centrepiece of Emaar’s Dubai Creek Harbour master development, was being redesigned.

He did not disclose the name of the new designer but said Emaar hopes to start construction next year. The plans remain for it to eclipse the Burj Khalifa – currently the world’s tallest building.

A 10% rise in 7 weeks

Kumar told AGBI a one-bedroom unit that faces the Dubai Creek Tower that was priced at between AED720,000 to AED770,000 ($195,000 to $210,000) is currently on the market for between AED875,000 to AED1 million ($240,000 to $270,000) – more than a 10 percent increase over a period of seven weeks.

He predicted that prices will cross into the seven figures after construction of the tower starts.

Homes facing the new landmark are already commanding the same or higher rates as those boasting Burj Khalifa views, Kumar added.

“As the tower is billed as the new tallest structure in the world, there is likely to be an unspoken premium that homebuyers will be happy to pay for a direct view,” Faisal Durrani, partner and head of research, Mena, at Knight Frank, said.

“While the new design is yet to be released, the previous iteration was centreed around viewing platforms, rather than permanently habitable space creating a ‘Dubai-ffel Tower’ effect.”

Durrani said direct and uninterrupted views of the Burj Khalifa often command premiums of 30 to 35 percent for apartments in the immediate vicinity.

Attractive investment option

Ashley Hawthorne, head of residential agency at Chestertons Mena, also noted an increase in sales in the Al Jaddaf area, with almost 10 per cent more transactions in Q3 this year compared to the previous quarter.

“The potential for future appreciation in property values can make an area like Al Jaddaf an attractive option for investors,” he said.

“It’s common for the announcement of a major new development such as Emaar’s Creek Tower to drive real estate investor interest in nearby areas, particularly those that offer affordability and are within easy reach of the project.”

At six square kilometres, the Dubai Creek Harbour development is almost twice the size of Downtown Dubai, another major real estate scheme.

It is expected to house 200,000 people when complete.

Last year, Emaar agreed to fully acquire Dubai Creek Harbour from Dubai Holding for over $2 billion. The amount was paid equally in cash and shares in Emaar Properties and made Dubai Holding Emaar’s second-largest shareholder.