One of Dubai’s biggest commercial developers is turning its attention to building freehold villas around some of its office schemes.
Tecom Investments, which operates 11 Dubai business parks including Dubai Media City and Dubai Knowledge Village, is developing 440 new off-plan homes close to its DuBiotech business park in the Al Barsha South area.
Tecom said that it would start to sell the Villa Lantana development of three, four and five-bedroom detached and semi-detached homes early next month with prices starting at Dh2.375 million.
It said that construction of the project, which is designed as two gated communities close to the Umm Sequim Road, was under way with completion expected at the end of next year.
Tecom said the scheme would also include a shopping centre, sports centres, parks and playgrounds.
“Currently, the demand is there for quality family villas in a good location. The project was designed to meet the demand for family homes located in the centre of new Dubai,” said Badr Al Gargawi, the chief executive for Tecom’s development and planning division.
“The new Villa Lantana development will reinforce our presence in the market and is aligned with our vision to create fully sustainable business communities,” he said. “As the Al Barsha South area of Dubai continues to develop and as the market grows sustainably, this is now the right time to bring Villa Lantana to the market.”
Tecom, which is owned by the vast business conglomerate Dubai Holding, reported in April that it was investing Dh1 billion in new projects – the developer’s largest building project for 13 years. The massive development also includes another 255,000 square feet of offices, a new 500,000 sq ft Dubiotech headquarters building to serve the science and energy sectors and an outdoor shopping plaza.
Dubai’s villa market was the first in the residential market to show signs of recovery after the global financial crisis, prompting many real estate developers to put money into the sector.
According to the property agent JLL, average villa sales prices increased by 23 per cent on a year-on-year basis. At the same time, prime office rents rose 8.1 per cent over the year to the end of June, while 25 per cent of prime central business district office space remains empty.
“It makes sense for a commercial developer like Tecom to build villas close to their commercial developments,” said Craig Plumb, the head of research at JLL’s Dubai office. “The residential sector has been the strongest performing in Dubai in recent years. This sort of development is likely to generate a strong cash flow for the developer.”
Gregory Lewis, senior negotiator at Knight Frank, said: “I think a lot of developers are realising that although there are a lot of very large villas and lots of apartment towers, there really aren’t very many affordably priced family homes for people to live in.
“At the moment there is a good demand in Dubai for smaller villas or town houses in this sort of Dh2 million to Dh3m price category from both end users and investors.”