Dubai’s Palma Picks Luxury Homes Over Hotels in Island Project

A Photo Illustration Of The Serenia Development
A Photo Illustration of the Serenia development, Palm Jumeirah, Dubai. Construction has started at the site and the project is set for completion by December 2017. Source: Palma Holding via Bloomberg

Palma Development, a privately-owned developer, plans to build a seafront residential community on Dubai’s Palm Jumeirah man-made island, according to its chief executive officer.

The 1.5 billion-dirham ($408-million) project will include 250 apartments in three buildings that utilize just 25 percent of a the land located between two luxury hotels at the tip of the Palm. The 227,000 square-foot (21,000 square-meter) plot came with a hotel license that the developer decided not to use.

“The conventional approach is to build hotels and residences, but we threw away our hotel license, which is worth a lot of money,” Kareem Derbas, CEO and co-founder of Palma, said in an interview ahead of the project’s announcement on Sunday. “We wanted to make this project 100 percent exclusive.”

Serenia, as the development will be known, is the latest in a string of projects being started even as Dubai’s residential market slows. Home prices and transactions declined as buyers from Russia and western Europe are put off by currency declines that make the U.A.E.’s dollar-pegged economy expensive.

“The market is slow but the demand for beachfront properties is unlimited and ever-growing,” Derbas said. “You always have a clientele for a beachfront property.”

Three “presidential penthouses” will be priced at 36 million dirhams, the CEO said. The rest of the apartments, ranging from one to four bedrooms, will be sold for 2 million dirhams to 15 million dirhams. Construction has started at the site and the project is set for completion by December 2017.

The development will be funded by equity and pre-sales and the company will resort to loans only if needed, the CEO said. Palma Development has built seven projects in the emirate, mainly in Dubai’s Marina.

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