Investing in Dubai: is suburban Jumeirah Village ideal for investors?

Investing in Dubai: is suburban Jumeirah Village ideal for investors?

Welcome to the sixth in a 7-part series on the investment opportunities found in Dubai. In each part of the series we will focus on a separate area of the emirate, highlighting the potential and attractive qualities that attract investors, tourists and expats.

The sixth area in our series is Jumeirah Village, a small, suburban area designed to create symmetry and encourage a diverse community. It may not have the glamorous reputation of Dubai Marina or Downtown Dubai, but does Jumeirah Village have appeal for investors looking for up-and-coming areas in the emirate?

 

Jumeirah Village

 

In short

Jumeirah Village contains both Jumeirah Village Circle and Jumeirah Village Triangle, and is located to the east of Emirates Hills. The roads, designed in a radial pattern to create symmetry, all end at a central community centre to encourage interaction between residents.

A family friendly development designed to provide a sense of community, Jumeirah Village comprises of more than 2,000 villas, townhouses and amenities. Providing a self-contained environment for residents in a village setting, Jumeirah Village includes sports fields, schools and mosques throughout the landscaped parks.

Great for: Families, expats, investors (short and long-term)

Attractions: The planned The Circle Mall and The JV Triangle Mall

Proximity to metro station: N/A

Average one-bedroom apartment sale price: AED 966,500

Average one-bedroom apartment rental price: AED 86,200

Best property type to buy: 2 or 3-bed apartments, as both command impressive 9% yields

 

In depth

Jumeirah Village, newly developed and growing, is currently experiencing a positive influx of people versus the high move-in and move-out rates that the established neighbourhoods expect. Of the ten areas in Dubai that experienced the highest move-in rates during the first three quarters of 2015, Jumeirah Village came in at 2nd – one position behind Dubai Marina, a perennial favourite. Other areas that featured in the list were Downtown Dubai, Dubailand and Emirates Hills.

One of the reasons for Jumeirah Circle’s popularity is the affordability of property in comparison to that found in the prime locations, with one-bedroom apartments commanding annual rents between AED 86,000 and 153,000. In 2015, Jumeirah Village was one of three areas in Dubai that experienced rental growth.  Rents for all property types in the area recorded returns close to 9%, leaving Jumeirah Village as a stand out location for investors.

Both Jumeirah Village Circle and Village Triangle are predominantly residential areas and were developed to create relaxed, open and private spaces, but two shopping malls in the development stage will provide entertainment and lifestyle attractions for both residents and visitors. The Circle Mall will contain 235 shops, a multi-screen cinema, a health clinic and eateries spanning more than 432,000 square feet, while Al Khail Avenue will offer over 1.5 million square feet of shopping and entertainment to the residents of Village Triangle.

These so-called ‘community shopping centres’ are beneficial to more than those who live or visit Jumeirah Village, but also to small and mid-tier retailers who have to fight for space at the larger, and more expensive, destination malls.

With the area understandably expecting a surplus of demand for property in the next few years, it’s not out of the question that prices in Jumeirah Village will experience rapid growth and rents along with them.

That being said, Jumeirah Village does have its drawbacks for residents and visitors alike. Notoriously poor traffic and sign posting leave the area familiar with gridlock traffic, however Nakheel, the community developer, has announced the planning of three new entry-exit points in January to help improve traffic flow and reduce journey times. Construction will begin on both the road improvement work and Circle Mall later in 2016, leaving Jumeirah Village with both solid short and long-term investment potential.

The final article in our series, the stunning and exclusive Emirates Hills. Known for attracting golfers and expats drawn to luxury, we look at how Emirates Hills could offer investors a worthwhile gateway to a under-appreciated suburban locale.

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