Apartment prices in Business Bay have increased 17% in two years

Faisal Durrani, Partner – Head of Middle East Research, said: “The significant growth in residential prices in Business Bay over the last two years is part of a broader repivoting of the city’s centre of gravity towards Central Dubai, encompassing the DIFC, the Sheikh Zayed Road area between the Trade Centre and Dusit Thani, as well as Downtown. Business Bay has found itself on the doorstep to Dubai’s main business district and in very close proximity to arguably the emirate’s most lifestyle retail rich neighbourhoods, such as Jumeirah and Al Safa.”

Excellent road infrastructure, courtesy of the Parallel Roads Project and much improved access to Downtown and the DIFC, the emergence of a vibrant residential community thanks to the delivery of almost 7,000 homes in 2019 and 2020 and prices that are, on average, 27% cheaper than Downtown, are all contributing to the all-star status of Business Bay. Developers are also concentrating their efforts on developing some of the city’s most expensive homes in Central Dubai in an attempt to satisfy the burgeoning demand for luxury homes”.

Dean Foley, Head of Residential Project Sales & Marketing, added: “Branded residential developers are alive to the geographic significance of Business Bay and we’re seeing ultra-high-end operators such as the Dorchester and The Cipriani family’s Mr. C Residences and Four Seasons upstream along the Dubai Canal hurriedly bringing through residential products that are redefining prices along this stretch of Central Dubai.”

It’s no surprise that as premium waterfront plots have all but been sold or developed, Dubai Canal has filled a gap in the market by providing added opportunities. Indeed, we are expecting the Marasi Drive area of Business Bay, specifically Canal fronting plots, to be a new hot-spot in Dubai – particularly with investors, pied-de-terre buyers and professional end-users working in DIFC and Business Bay”.

It’s not just Business Bay, but the wider Central Dubai area that has caught the attention of developers and buyers, according to Knight Frank. In cities around the world such as London, or New York, city centres are easily identifiable and often command the highest prices. What we are seeing now is the emergence of Dubai’s new centre. The type of developments and branded residential operators entering Central Dubai are helping to cement this.

And Knight Frank says the US$ 10 to US$ 20 million ticket prices for high-end branded residential developments, which would have been perceived to be outlandish five years ago are being easily achieved, giving Business Bay the privileged position of an emerging prime location in Dubai.

Dubai’s most expensive apartment to ever sell was an Armani branded apartment at the nearby Burj Khalifa back in 2014 for over AED 14,000 per square foot. And the popularity of branded residences has continued to grow. After accounting for 11% of all residential deals by value last year at AED 12.7 bn, Q1 2022 has seen a similar share of branded residential sales.

“Apartments in Downtown (23%) and on the Palm Jumeirah (21.5%) have experienced the strongest price growth since the onset of the pandemic, with Business Bay (16.7%) following in third place. And since Covid-19 began, we have seen that more affordable locations in the city, at least in terms of prices per square foot, have seen slower rates of growth. Dubai Marina for instance has been somewhat of a laggard in the price growth race. Apartment prices here are up by a relatively modest 5.6%. Aging residential stock and increasing congestion may be contributing to the slower growth. Clearly there are exceptions to this such as Blue Waters, Emaar’s Beachfront, Le Reve, or The Address Beach Resort”, Durrani pointed out.

Branded residential developments on the Palm Jumeirah saw average transacted prices rise by 47% to almost AED 3,700 per square foot during Q1 2022, says Knight Frank.

“Dubai’s residential market is maturing and with prime residential real estate still significantly cheaper than other global gateway cities – US$ 1 million buys you 1,330 square feet in Dubai, four times more than you would be able to secure in London or New York. International buyers are quickly recognising the relative value of Dubai that comes with the added bonus of an unparalleled and luxurious lifestyle”, Foley concluded.

For more information, please contact Faisal Durrani.