The new thing in the Dubai development boom: Hotel apartments
Photo Credit: A drive through Palm Deira, an artificial archipelago that is part of the Palm Islands in Dubai. Flickr / Michele Solmi
Skift Take
Dubai hotel occupancy is among the highest in the world at 88 percent, but few are the full-service apartments that appeal to business travelers, frequent regional visitors, and most importantly, investors.
It took Damac Properties Co. one day to sell the first 200 units in its Hollywood-themed apartment and hotel project as buyers seized the opportunity to invest in Dubai’s booming tourism market.
The closely held company, working with Viacom Inc.’s Paramount Pictures, plans to finance the $1 billion, four-tower development in part with proceeds from advance sales of serviced apartments. Buyers of serviced apartments, so-called because the hotel operator provides services including house cleaning, bed- making and Wi-Fi, can rent them out through a central reservation system, with annual yields that can exceed those from conventional apartment buildings.
“Rents can reach double what you’ll normally get on a long-term lease,” said Ronald Hinchey, United Arab Emirates director at Cluttons LLP, a property management and consulting firm. “It’s a very good investment, simply because hotel occupancy and rates are very high at the moment.”
The depth of demand for service
