The cube is an interesting model as you put it. This looks to be a good investment, but was all sold out the last I heard of it.Anyone have thoughts on The Cube in Sports City as an pure investment?
Looks like an interesting business model and risk spread across the whole hotel - they say every owner gets the same returns. Any thoughts would be welcome.
Each investor has a particular model. Some investors would like to enter flip and exit making money or at times loose also.Rosan,
thanks for your thoughts.
Not sure what your background is, but would you suggest any better investment opportunities.
WOW a good decision. I have friends of mine who followed the same idea and co invested 5 properties. They have done well for themselves.Thanks DPC.
Is anyone out there interested in co-investing in THE CUBE.
I want to buy but can't afford the whole thing and don't really want to go down the mortgage route.
Let me know.
Falak has 90% fnance by Amlak.DPC,
not having any mortgages available for Sports City is a little concerning?
Basically this suggests the banks see this as greater risk than other areas?
ALso why would their be resales if it's such a good deal?
Where do you find the resales anyway?
In terms of the co-investing I know a few other that are interested as well so together maybe worth a shot.
What is your background by the way? Is this your full time job or just a hobby? I ask as you mentioned your network?
Papakilo
DPC,
not having any mortgages available for Sports City is a little concerning?
Basically this suggests the banks see this as greater risk than other areas?
ALso why would their be resales if it's such a good deal?
Where do you find the resales anyway?
In terms of the co-investing I know a few other that are interested as well so together maybe worth a shot.
What is your background by the way? Is this your full time job or just a hobby? I ask as you mentioned your network?
Papakilo
Hi Papakilo,
It seems that there are the odd mortgages that I was not aware that have been mentioned in this thread, however banks don't really do sports city as they should. We don't really know why banks don't. The escrow accounts for developers are now mandatory, so this greatly reduces the risk to lenders. This means that the developer can't start on another project with the money made from the sale of a previous project until it is complete. One of the reasons could be that banks in the UAE are generally acknowledged to be slow to change. They have been so in the past. For example, they are slow to cut interest rates (UAE's interest rates are pegged to the US) so the lenders should have slashed their rates ... but they haven't. In reality, its a bit of a controlled market and really needs competition. The mortgage situation frustrates the life out of buyers and investors in and out side of the UAE.
In saying that, the mortgages will eventually come - like they did in other areas. That will increase prices.
In regards to your questions on resales ... there are still quite a few people who flip their properties, as it was always their intentions to do so or because the prices have gone up and they want to cash in. However, resales shows a vibrant market. I always worry when there are very few resales (i.e. Spain). Its one of the reasons, why I'm waiting a bit longer on Abu Dhabi and Ras Al Khaimah - they don't have any resales.
I would say in Dubai, if you can find a great location at a good price in any project, you have nothing to be worried about. This is because of the fundamentals of Dubai's growth (GDP, population, tourism etc..).
As for my background, I was business strategy consultant for big consulting firm in the UK. I started investing in Dubai a while back and have made a lot of contacts as long term investor. I now invest in Dubai and run an investment and sales service only for properties that I have invested in or would like to have done (if I had that much). It's much more enjoyable than my previous job and something that I actually have a passion for !!
Mortgage in Dubai is still in the baby steps as compared with international fiancing. Interest only mortgage, ballon mortgage are un heard of in Dubai but are very popular in UK, USA.Hi Papakilo,
It seems that there are the odd mortgages that I was not aware that have been mentioned in this thread, however banks don't really do sports city as they should. We don't really know why banks don't. The escrow accounts for developers are now mandatory, so this greatly reduces the risk to lenders. This means that the developer can't start on another project with the money made from the sale of a previous project until it is complete. One of the reasons could be that banks in the UAE are generally acknowledged to be slow to change. They have been so in the past. For example, they are slow to cut interest rates (UAE's interest rates are pegged to the US) so the lenders should have slashed their rates ... but they haven't. In reality, its a bit of a controlled market and really needs competition. The mortgage situation frustrates the life out of buyers and investors in and out side of the UAE.
In saying that, the mortgages will eventually come - like they did in other areas. That will increase prices.
In regards to your questions on resales ... there are still quite a few people who flip their properties, as it was always their intentions to do so or because the prices have gone up and they want to cash in. However, resales shows a vibrant market. I always worry when there are very few resales (i.e. Spain). Its one of the reasons, why I'm waiting a bit longer on Abu Dhabi and Ras Al Khaimah - they don't have any resales.
I would say in Dubai, if you can find a great location at a good price in any project, you have nothing to be worried about. This is because of the fundamentals of Dubai's growth (GDP, population, tourism etc..).
As for my background, I was business strategy consultant for big consulting firm in the UK. I started investing in Dubai a while back and have made a lot of contacts as long term investor. I now invest in Dubai and run an investment and sales service only for properties that I have invested in or would like to have done (if I had that much). It's much more enjoyable than my previous job and something that I actually have a passion for !!
Very intersting information which we didn't know about. I always thought they would be a fixed percentage in these kind of models.I was considering buying into the Cube about a year ago, at prices around 1230/sft on 18th floor. Now prices are around 20% higher.. And I still think it is a good solid project with a high quality German builder.
BUT, the system for distributing/pooling the rental income on the individual units is very unusual and with quite unpredictable effects on the future value of respective units: The normal way of pooling income would be to take the individual units area size as a percentage of the total rentable area. BUT, instead, in order to "guarantee" all units the same rental return, the pooling is done as the following:
Each unit sale price as a percentage of the total sale amount after all units have been sold. In this way, a unit sold today for a price 20% higher than an identical unit a year ago, will also have a 20% higher share in the total income pool. This will ensure same yield for both units. But this will also make it quite complex in the future to assess values of the units. I have never seen this pooling system anywhere else before, and I am sure it will have many surprising side-effects for the unit owners when they will sell.
AND...think many times before you buy a resale unit for a price below the official price list. Because it will most likely have a smaller part of the income pool, it might in effect be a much less attractive deal than what appears..
HiHi, I have invested in the Cube and bought about 8 months ago. The Cube is not sold out. In phase I they release floors 1-11, and in the second round of sales floors 12-23 were released. They have another round of sales in the future to finish off the building. The Cube is in my opinion, one of the best projects out in Dubai for rental returns. I spoke to the project manager at the Cube and they have absolutely no funding problems so they are phasing the sales so they benefit from the appreciating value. They have already increased the price several times and resales are aplenty for those who have made a profit and want to flip their Cube properties. The price will continue to go up.
The Cube sold itself offering 10%+ returns. They do a 50-50% split of the room night with the owners (split according to the proportion of the square foot of the hotel that you own). Essentially, if your room gets £100 (AED ~750) a night, you will get £50. Occupancy, given Dubai's 5 star hotel occupancy this year, will be 90%. The Cube's original figures were based on 70% occupancy at £100 for the smaller suites. However, the likelyhood is that it will see 90% at nearly £200 based on current rates. This means that returns will be nearly 30% (with around 3% maintenance costs) per year. I would also expect the room rate to increase by the year as Sports City completes and becomes one of Dubai's main attractions.
From my conversations with the Cube's project manager, they are also tying up with major sports brands such as Germany's biggest football club Bayern Munich ( a huge name in European sports) within the next couple of months.
I own a Dubai property investment and sales company and I believe this to be one of the strongest investments in Dubai (despite recent price increases). I will be happy to offer any property consultancy and of course any sales of Dubai properties.
See my answer above. To my understanding the distribution of income is made according to purchasing price NOT the sqft area of apartment. This is very unusual and will create quite unpredictable prices in the second hand market for the various apartments bought in different price levels.. Due to this I would think twice before committing to an investment here. Since you've paid a deposit - check this directly with the developer to get the facts.Hi
Re- your post regarding The Cube.
I have recently co-invested in a studio at the Cube (paid a deposit) but am not 100% sure of this investment.
Is the rental based on the price or sq. foot of the apartment?
What are the long term prospects of this investment?
Thanks.
Ash.
HiHi, I have invested in the Cube and bought about 8 months ago. The Cube is not sold out. In phase I they release floors 1-11, and in the second round of sales floors 12-23 were released. They have another round of sales in the future to finish off the building. The Cube is in my opinion, one of the best projects out in Dubai for rental returns. I spoke to the project manager at the Cube and they have absolutely no funding problems so they are phasing the sales so they benefit from the appreciating value. They have already increased the price several times and resales are aplenty for those who have made a profit and want to flip their Cube properties. The price will continue to go up.
The Cube sold itself offering 10%+ returns. They do a 50-50% split of the room night with the owners (split according to the proportion of the square foot of the hotel that you own). Essentially, if your room gets £100 (AED ~750) a night, you will get £50. Occupancy, given Dubai's 5 star hotel occupancy this year, will be 90%. The Cube's original figures were based on 70% occupancy at £100 for the smaller suites. However, the likelyhood is that it will see 90% at nearly £200 based on current rates. This means that returns will be nearly 30% (with around 3% maintenance costs) per year. I would also expect the room rate to increase by the year as Sports City completes and becomes one of Dubai's main attractions.
From my conversations with the Cube's project manager, they are also tying up with major sports brands such as Germany's biggest football club Bayern Munich ( a huge name in European sports) within the next couple of months.
I own a Dubai property investment and sales company and I believe this to be one of the strongest investments in Dubai (despite recent price increases). I will be happy to offer any property consultancy and of course any sales of Dubai properties.
