UAE: Having announced its first serviced apartment project in March, Dubai developer Deyaar has plans for two more schemes.
Deyaar has launched a 19-storey block of 180
hotel apartments in Al Barsha South, near the science and biotech
free zone DuBiotech. Expected to be complete in 2016, the block
will form part of the company's Montrose complex, which will also
include two 19-storey towers of residential apartments.
Its third project will be a Dh450 million Sharia-compliant tower on two plots of land in the Al Barsha area spanning a total of 71,000 square feet. The tower is currently in the preliminary design phase.
Deyaar was initially formed as the property management arm of Dubai Islamic Bank but was spun off as a private property company floated on the Dubai Financial Market.
Filippo Sona, head of hotels for the Middle East and North Africa at Colliers International, said: "The reason that so many UAE developers are building serviced apartments at the moment is that they are capable of making much higher returns than ordinary leased apartments. Serviced apartments can fetch a premium of between 36 and 41 per cent more than an equivalent apartment rented out on a yearly lease. Traditional developers understand the business model because they are usually sold off to investors at the start of construction, and if the market turns they can be leased out like ordinary apartments."