Put on your seatbelts, here we goJune 23, 2015 9:00
The Ugly Side Of Dubai’s Real Estate Revival
A sporadic Dh8,000 annual parking fee slapped on at JLT reminds Kipp of the nasty side of the property boom in Dubai.
August 12, 2012 3:59 by Eva Fernandes
Over the past few months the business section in the local press has been heralding the comeback of the real estate sector. Kipp, too, has shamelessly jumped on the bandwagon. We’ve quoted the 82 percent surge in Emaar’s profit this quarter and 40 percent increase in profits Nakheel has enjoyed as proof that the tables have turned.
And though financial quarterly reports are useful benchmarks, they aren’t really all that necessary to gauge the health of the real estate sector. If you really want to get a feel for how well Dubai’s realty is doing, then just see how shoddily developers are treating their tenants.
A perfect example of this is the extraordinary fees developers at Jumeirah Lake Towers (JLT) are charging tenants Dh50,000 to purchase a parking spot. Failing that, one can shell out Dh8,000 to rent a parking slot for a year. Of course this is just a rough estimate. Developers of individual towers within JLT are allowed to set fee structures as per their own wishes.
So what is the big deal you may ask? After all, several towers within Dubai Media City follow a similar practice. This may be true, but if you have had a chance to visit the tower-cluttered cluster that is JLT you would know free parking options outside of those within the towers, is very limited indeed. Also, prior to this, parking was free-tenants, home owners and office owners opted to set up shop in JLT with the understanding that they were guaranteed free parking. To slap on a Dh8,000 parking slot charge is akin to pulling the rug from under the legs.
You could also argue that parking spaces in cities are known to be ridiculously steep. Consider the cool $1 million the owner of a private garage at 66 E. 11th Street, Manhattan, will have to pay for one of New York’s most expensive parking spot. Or how about the $300,000 parking spot which comes with a 24-hour valet attendant for an extra $32,000 at Boston Common, at 170 Tremont Street?
In comparison Dh50,000 ($13,614) doesn’t seem as steep-but that is hardly the point. The matter of the fact is, Dubai’s developers don’t have a very good track record when it comes to treating their tenants and home owners. Rents sky rocketed to unrealistic steep rates during the boom—at the time, it was a landlord’s market and it wasn’t uncommon to find a Dh5,000 fee slapped on overnight to use a parking space that previously used to be free. Now things haven’t gotten as bad yet, but all we are saying is we’ve seen this kind of spur-of-the-moment opportunism (for lack of a better word) used by developers before and we don’t like where this is heading.