Palm Jebel Ali: Dubai’s Next Big Investment

Hi, I'm GG Benitez, and this is season four of The Dubai Connect podcast. So when you think of Dubai, undoubtedly the images that first come to mind include the Burj Khalifa, the Dubai Marina, and probably one of the most iconic addresses in the entire globe: the Palm Jumeirah, which in fact you can actually see from space. So today I have my partner in crime on the ground here to discuss not only Palm Jumeirah, but Palm Jabel Ali. Thank you so much for being here and joining me on the podcast. It was always a pleasure. We have been spending a few weeks now, obviously before we knew what was coming up, but especially the past few weeks in Emaar's office, to really gain an understanding of what they're doing with Palm Jabel Ali, which is getting global attention. We see Ryan Surround was just here two weeks ago talking about it and he's talking about it a lot. But I want to actually go back a little bit and ask you: weren't you here when they launched Palm Jumeirah? Okay, before we get into details about Palm Jumeirah, let's talk about a few fun facts. To answer your question: yes, I was here to witness the first launch that took place in Palm Jumeirah. The apartment was the Shoreline Apartments. Back to fun facts: Did you know, GG, that Palm Jumeirah was built with millions of tons of rocks and sand? No concrete or steel was used to create the entire island. I did not know that. Exactly. You and a lot of other people. So this would be a great fun fact for our viewers globally who had no idea how the Palm Island came into effect. Number two: the amount of rocks and sand that was used to create the entire island equals basically building a two-mile wall wide around the globe three times. Could you imagine that? Wow. And how long did it take? It took roughly around six years to build the island. And how many years ago did they launch it? It was in 2002 when they officially came and launched it. So that's aging you a little bit. Exactly, yes. That tells a lot of people how old I am. They started off launching the project with the island with the apartments, which are the Shoreline Apartments, and of course the 1,500 villas. Tell me, Ahmed: at that time, how easy was it for you to sell this project? Probably so many people were thinking: what are you talking about? What are you selling me? This random space out here in the shape of a palm, right? What was that like for you at that time? I still remember it as if it was yesterday, GG. Believe it or not, it was 2002, and I had just moved from the US. We had a briefing presentation in Emaar's office, and the sales pitch was: how would you like to invest in one of the eighth wonders of the world? That's the tagline they were using at that time. Eighth Wonder of the World. That's exactly what we were pitching, and I was amazed by looking at the island itself. Obviously there was nothing there at that time. Yes, it was challenging. I had to pretty much excite people's imagination as to what was going to take place there so they would have a piece of it. But GG, that was not really a challenge, to be very frank with you. When people found out about the island, Palm Island, it was chaos on the day of the launch. Imagine: the launches were still chaos 22 years ago, so it's not just something you're starting to see in today's market. So it was even back then, of course? Of course. Two of the biggest projects when they were announced and launched were one: Palm Jumeirah. The other one was Burj Khalifa. Yes, it was a nightmare. It was a nightmare. People were standing in queues for hours. By the way, at that time, Emaar had sent out invitations to certain brokers and investors. So if you didn't have an invitation to come and purchase the unit you wanted, you were not allowed to get in. Wow. So it must be surreal for you to now fast-forward decades and see what Palm Jumeirah has become, where you have celebrities right there living on the island, purchased there. I mean, the Beckhams of the world, and really globally renowned names. You have the Royale, where Beyonce performed and spent I don't know how many millions to have her come perform there. And it's really known on a global level as a very exclusive, upper-end, for a very discerning buyer. This is not for everyone, because obviously the prices are not cheap. Which I want to ask you about, actually, at that time. Because I think this allows us to look at when you look at the history of waterfront, coastline, island in Dubai, it also helps us to look into the future of what to expect in Palm Jabel Ali. What were the prices per square foot when they launched, and what has the trajectory been since then? Well, GG, I'm about to blow your mind. You're not going to believe what I'm about to tell you. The Shoreline apartment, which was one of my first sales during the launch, a one-bedroom: we were selling it at 600,000 dirhams. That's under $200,000. Exactly. Where today, in today's market in a resale, you will find a one-bedroom Shoreline apartment somewhere around 3.5 to 4 million dirhams. Yes, the prices have definitely increased and they continue to, of course. For example, we're just talking about the apartments. The villas: a 7,000 square-foot villa at that time. The original price I remember we sold was 4.5 to 4.7 million. Today you're looking at the same villa selling for anywhere from 100 million to up to 350 million. It has appreciated almost 500 times. It's unbelievable, and it continues because it's rare, of course. It's unique. It's exclusive. I mean, to be able to say your address is the Palm, right? It has that flavor to it. Of course. Well, GG, let's bear in mind that Palm Jumeirah was definitely a blessing for the smart investors who actually had a history of real estate investment, who knew what they were doing, when to get in, when to get out. But definitely a curse for the newcomers who had never invested in real estate and had no intentions of long-term investment. These are the people, investors I should say, who came in during the second phase. Meaning they came in when the capital appreciation was happening. That same 4.7 million villa was selling at 30 million. Okay, okay? So these set of new investors came in for a quick flip. They came in and purchased them at 30 million dirhams. Unfortunately, that's when 2008, the global bubble crash worldwide, took place. These are the first people who took a massive beating and exited out, holding it and just waiting for the cycle to go through. Because I personally had my own investors, the smart investors who did not care. They held on to their properties. They were already getting nice rental returns from them. They were calm because they'd already been through that cycle back in their own countries where they came from. They knew that what goes up must come down, but then eventually it must go up again. And guess what? Exactly. Four years later, the prices came back to what they were, and even higher. Year after year. Exactly. Yes. Palm Jumeirah was not everybody's game, and it was definitely not for the weak-hearted. I like how you describe that: timing the market. That's why it's really important to work with a real estate professional and an experienced real estate agent in Dubai's market specifically, right? Because exactly: we're different than any other market. Buying here does not apply the same way it does elsewhere. I have my real estate license in California. It's a different strategy to maximize ROI and capital appreciation in California than it is in Dubai. So that's why our combination works for our investors: you bring experience, I bring my American location and American certifications and my personality. But I think it's really important that you said timing the entry. Yes. And we see right now with Palm Jabel Ali, it's still an excellent time to buy. We were just at Giorgio Armani by Arada's showroom yesterday, talking about that exclusive project. You have penthouses that are how much? 600 million. I mean, so it is one of the most exclusive areas in the world. Anybody, any celebrity, any ultra-luxury investor, anybody would know what the Palm is, right? Correct. By the way, fun fact: the word itself means palm, and there's a symbolic meaning behind what the palm symbolizes in this entire region: resilience. And the fact that it's built, although there are other developers on that island as well, correct, the restaurants, I mean the restaurants at the hotels. I keep saying Casino Royale, but at the Royale, at the Atlantis. The restaurants at the Atlantis, for example: some of the best restaurants in the world, right? And people worldwide watching. And then just that lifestyle on the Palm is an elite lifestyle. Now, there are having said that, and it's amazing. There are some challenges to Palm Jumeirah that we know about, and you and I were talking right before the podcast started. You can't hide them. There are some challenges such as traffic. It wasn't always rosy. It wasn't a rosy picture for Palm Jumeirah. There was a lot of challenges that Palm Jumeirah had to face. Let's not forget it was one of a kind, the first time in history they had created such a thing. I mean, the first time in history to create something like this. You must give credit to Emaar for pulling it off. Because I remember Ryan talking about this, and he was like: wow, I wish we could do such a thing in New York. But you can't. Exactly. But they can't. It's not their cup of tea. They cannot replicate the same thing because they've never done it. So the experience lacks over there. Yes, there was a lot of challenges. One of the biggest challenges was to basically control the currents hitting the island at the fawn itself. That's why they created the Crescent that you see, where the Armani hotel is coming, and of course where the Atlantis Royale is. The whole purpose of the Crescent actually is to protect the island. I didn't know that. Yes, from the strong currents. So there's a whole strategy. Of course, and then it looks so incredibly beautiful. True, exactly. And then, of course, if you notice along the Crescent, on the right side there's a big gap opening, and then the breaks, and one on the left side. So there's a total of two. The purpose of these breaks was to have a much smoother flow of the water, the seawater, so that way we would not struggle with stagnant water between the fawns. But unfortunately it was not enough. We did see some challenges where there was a problem with water circulation over there. Yes, during summertime when the temperature gets extremely hot, yes, you would feel a little bit the stench of the ocean and so forth on that end. And that's which is why they went and did everything they can with Jabel Ali Palm, where they would not repeat the same mistakes. Yeah, actually, when we were in the showroom, we did a video side-by-side comparison of Palm Jumeirah and Palm Jabel Ali. So I will link to it in the video just for someone to quickly watch. Exactly. But exactly, I think they learned the lessons to improve. That's why they're calling it Palm Jumeirah 2.0. Although I still fully believe Palm Jumeirah is going to be one of the most successful stories in the world, because just the location where it is. But now, I mean, they are doing it. Isn't it twice as big now? Palm Jabel Ali itself and the way it came into shape is very inspiring if you listen to their story. One of the second challenges that Palm Jumeirah faced was the entrance and exit to the island. At that time, I guess Dubai had no idea how fast the population in this country would grow, or the number of tourists. Imagine that though. How could you possibly imagine? Exactly. I never imagined. Me being here 24 years, I never imagined we would be where it is today. Did you imagine 24 years? You and I would reconnect on this continent sitting and talking? Exactly. So you cannot predict such things, and unfortunately, that's what they had not done: predict the traffic flow. Currently, if you go there, there's just one in and one out. And once again, going back to Jabel Ali Palm: this time they made sure there's one on one side of the Crescent, one in the middle, and one on the far left and far right of the crescent. And what they did at that end, what do you call that at the very end of it? There's no direct access. Access, exactly. So I think, and we have yet to sit and wait to see what they have coming there. But they're very strategic. Something cards out in one shot, which is very smart. I prefer it that way. One thing, exactly. So yes, this was one of the second biggest challenges that people at that time were facing and complaining about, of course. The third challenge that they felt was the quality of these villas. Most people, most investors thought at that time, and bear in mind, the ones who were complaining were the ones who came on the third wave or the fourth wave of a resale of these villas. When you're buying a 7,000 square-foot home on a private island with your own private beach right in your backyard, a four-bedroom for one million US dollars, GG, you cannot go wrong. It was literally. I personally feel that compared to the US, if you would buy something like this, minimum, you would not get anything for less than 10 to 15 million. Here you are buying it for almost 4.5 million dirhams. So for you to come on the fourth wave and buy the same house for 30 million dirhams, you cannot say that the quality is cheap. The first original buyers paid only 4.5 million, so they got what they paid for. So if you decided to pay 30 million, you basically bought in during the hottest time of the market. You bought it when it was already a trend. You bought it when the island was already fully operational, right? So yes, this was one of the unfortunate complaints or the downfalls we saw at that time. But did that stop the capital appreciation from growing? Of course not. It didn't, because the numbers now are just phenomenal. What's the average? Isn't it 7,500? Around that's the price per square foot you're looking at, exactly. They started off like almost with 1,000 dirhams per square foot. So now, as we said, let's shift into the Palm Jabel Ali launch. Although there will still be other developers launching in Palm Jumeirah, and our viewers should still be on the lookout to see what's happening in Palm Jumeirah. I really am a huge fan of Palm Jumeirah. I just think that, as an American, as I said at the beginning of the podcast, when you think of Dubai, you think Burj Khalifa, you think the marina, and you think Palm Jumeirah. I'm a huge fan. But we look at Palm Jabel Ali. So as you just so eloquently discussed all of the challenges and the fact that you were here to experience them all adds just so much more to it versus me learning secondhand. But I learned the same thing, and now you look at Palm Jabel Ali. They took those lessons, poured them into Palm Jabel Ali. So now we have the three entries, like you said. We have five breaks now, I believe? Five breaks to add for circulation, to not have the stagnation, exactly, and then the Crown is going to be separate access, more exclusive access. That reduces traffic coming up there. Not everybody can get up there. And there's now a beach, a private beach on both sides of the Crescent, correct? And it's twice as big, exactly. So also, it's in a different area. It's further south, right? Which means now you're closer to the Al Maktoum airport, which is going to be the largest international airport. The government is building and spending billions of dollars on the infrastructure and connectivity for that whole area. Reduced traffic, better access, and connectivity to the rest of Dubai. I mean, Dubai is small anyway, correct? So when someone says something like isn't that too far out, I can understand. Coming from the United States, maybe I would think the same thing. But then when you come here and you realize suburbs here are 20 minutes out, correct? True, unless you're stuck in traffic, exactly. But to that point, there are vertiports, and there are going to be exactly the helicopter taxis. What are they called? That are going to be operational probably in about two years, yes? So Palm Jabel Ali is already going to be like one of the stations for the vertiport. I'm sure Palm Jabel Ali now in Dubai. And then they're also going to have what is that called the pods that are going to transfer. I did read something like that. They'll have these portable pods as transportation. How interesting would that be? I mean, it's just: Dubai is like something out of a sci-fi movie, absolutely. So let's okay. We know now Palm Jabel Ali is getting so much attention, and even in America it's getting a lot of attention. You know, we have the Ryan Surround of the world that are coming here and seeing firsthand what is happening in Dubai. If you love real estate and you love iconic addresses, you know about Palm Jumeirah, and now you're going to start learning about Palm Jabel Ali, correct? But let's talk a little bit more about Emaar and why it's so important that Emaar is the master developer behind both of these projects, because Emaar has really shaped the skyline of Dubai, right? And being that whenever we talk about who the developer is in anything that you and I are trying to talk to our investors, our strong strategic investment choices, we talk about some of these that are the largest developers in the UAE, with Emaar being one of them, correct? And then just recently combined with Dubai Holding, correct? So it's actually one entity right now. They're all under the same umbrella. Your Mira is also part of Emaar right now. What does that mean to an investor? It means that you have a much more sense of security, because they've always been semi-government, but now also they are backed up financially. Basically now you're not segregated as a different developer or competing against each other. So to have them all under one umbrella, I feel they're much stronger this way. Exactly. And one of the biggest concerns people, or I should say most investors always have, is: will there be a delay with our project handovers due to financial reasons or whatever the case might be? But financial reasons will never be the case anymore with these three coming under one umbrella. Very good point. So that's why I believe everything: we keep always saying that Dubai always learns from other people's mistakes. And I think that's why Dubai's real estate market keeps getting stronger and stronger rather than having a bunch of hiccups throughout the way, because we are not giving ourselves the chance to make those mistakes. Palm Jabel Ali will be one of these examples. Where they lacked in Palm Jumeirah, they will make sure that this one will be even more outstanding and stand out than Palm Jumeirah itself. And GG, one of the other highlighted points we should discuss is how they've tried not to overcrowd the island like they did Palm Jumeirah villas and, of course, the Shoreline Apartments. We do not know right now what exactly will come on the trunk. But one thing for sure: as we spoke to one of the heads at Emaar, they will not create the same chaos, the overcrowding of buildings and hotels on the trunk like they have done in Palm Jumeirah. I think it will be much more of an exclusive, a smooth-flowing trunk area compared to what we see in Palm Jumeirah. It's amazing that I feel like now I'm going to be part of history 2.0, and you were part of the first story that really helped people know about Dubai, right? Between the Burj Khalifa and this. I believe that's true. Of course, GG. I mean, imagine 2002 when there was nothing in Dubai. When the news was out that Palm Jumeirah was going to be launched, one of the eighth wonders of the world, people did not hesitate to invest. Imagine at that time when you had nothing to prove that your money is safe in this country. Imagine now where Dubai has nothing to prove to people. When you could see what's out here, where Dubai has built a city within a city in a span of 22 years, people should have no doubt that Palm Jabel Ali will definitely outsucceed the original Palm Jumeirah. Well, they recently had their launch of the villas, and the pricing was starting around 2,000 dirhams per square foot, which is amazing. Yes, you're looking at 2,000 dirhams today. For example, in Dubai South, for an apartment today, you're paying 2,000 dirhams per square foot. So how could you go wrong by paying 2,000 per square foot exclusive? Exclusive iconic, right? So exclusive with the water. I mean, they had seen some videos of our sales directors at Emaar. They had gone to visit the site, and just the sand against the water and how unique it is when you're on these fawns, right? And that exclusivity and that beauty. So for the end user, for someone who wants to experience this very elite lifestyle, to be able to say you live or have an address, I mean, to be able to say your address is at the Palm. And for our investors who want to have a slice. If you missed out on the Palm Jumeirah opportunity in the early stages, and obviously we know the early stages are the best time to get into any off-plan project. So because every time they come and release or launch a whole different phase, please bear in mind that the price per square footage keeps going higher each time. And GG, you just brought up the point about how interesting it would be for our end users to come and use their properties when they're visiting Dubai. But let's talk about the investors who have no intentions of either living in it or even coming to Dubai. Because as you know, most of our American investors, most haven't even come here. Yeah, most haven't. Will never come here. They should come to Dubai, exactly. But let them please bear in mind, GG, that this is not a short-term investment. This island will take time, yes, to be full-fledged and up and running. So if you're thinking about coming and investing to assume that in three years I could just flip and make a hundred percent premium. One? This isn't the one. You're going to have to sit and marinate on this one. I would say minimum, GG, to be on a conservative side: eight years, really? Yes, okay? That's my personal opinion. Because the miracle that we faced in Palm Jumeirah will not be here. You know why? Because back in those days, the market was not regulated. So every owner had the right to get up and sell and charge whatever they felt was right to sell their home. But today we have regulations. You cannot just simply get up and flip your property. A certain amount has to be paid in order to do that. So there are a lot of factors that come into place. So people back in those days were treating Palm Jumeirah like a stock market. Yes, this is not a stock, and it is very important for investors to keep that in mind. Because this is not everybody's cup of tea. This requires a special niche investor market for itself. So if you're planning to come in thinking you're slick and sly, I will play this out like I play cryptocurrency or the stock market. No, please not. Not the Palm. Not the Palm. Exactly. Well, that was beautifully stated. I love that you bring your perspective of the personal experience with that. We'll share some of the videos that we have of behind the scenes at the showroom and at the site. Show as much as we can for our interested investors and not just the investors, for those who want this address to live in. Because I know I would if I could. About it. So with that, thank you, Ahmed, for joining us today on this topic. Please make sure to stay tuned and subscribe. I actually will add my newsletter link in the description so that you can stay updated for when there are going to be new launches upcoming in Palm Jabel Ali. Remember that with Emaar, because they are one of the largest developers in the UAE and one of the most respected and the highest in demand, and this is so exclusive that you have to be strategic with talking to your agent ahead of time to prepare and to secure that equity and to be ready. Because this is not something that is going to sit around and wait, right? That's one of the most important things. So with that, please make sure to like, subscribe, and follow and stay tuned for the next episode of The Dubai Connect podcast. Everything.