Dubai, UAE - Amlak Finance PJSC, the largest real estate financier in the Middle East, today opened the doors of Skygardens for an exclusive viewing by the media. Skygardens is the first ready to move-in high-rise residential tower located at the heart of Dubai International Financial Centre (DIFC). This spacious architectural masterpiece has been completely designed by Fendi Casa, the world renowned house of style, and the apartments will bear its double-F insignia.

Speaking during the media tour Mr. Arif Alharmi, Chief Executive Officer, Amlak Finance PJSC, said, “This is a unique address brought by Amlak to all our customers, a one of its kind ready to move in development to be completely designed by Fendi Casa. The tower consists of spacious contemporary apartments of different sizes to suit individual requirements, intertwined with exquisite gardens and plenty of open spaces.”

The residences, ranging from a studio, one, two bedrooms, duplexes and penthouses have spectacular views of Emirates Towers, The Gate and Burj Dubai. There are a total of around 500 units with five typical floor layouts. Adding to this there are five exquisite gardens, each with their own distinct character, lighting, and design.

Alharmi added, “We will soon be retailing the units in the UAE as well as international financial centers that are of strategic importance to DIFC such as London, Singapore, Hong Kong, Tokyo and Germany. We will offer competitive financing packages to our customers who are interested to invest in Skygardens”

The deluxe 39-floor tower, developed by Mazaya Real Estate, is the first residential building to anchor the DIFC and includes extensive landscaping with park-like environment as well as unparalleled luxury lifestyle. Skygardens is located south of the Gate and Emirates Towers, our most prestigious neighbors and moments drive from Sheikh Zayed Road and Emirates road connecting Dubai with all other emirates.

Unless you have been living in a cave in Afghanistan for the last several years, it will not have escaped your attention that the property market in the USA is “having a few issues.” Record foreclosures, new laws being written in seconds and changes being made to the IRS rules – all to deal with the sub-prime crisis. Some parts of the country have seen property values drop by as much as 50% practically overnight. These issues are bleeding over into other world markets with investor confidence dropping like the proverbial lead balloon and banks hurriedly tightening lending criteria as quickly as they can replace their CEOs.

Yet the luxury market has been largely untouched. Manhattan, Singapore, Hong Kong, to name just a few, have continued to see record prices in the Luxury real estate sector. Why?

Cash. The luxury sector is driven by cash purchases rather than poor quality, over priced, under-funded loans. Wealthy real estate purchasers are unlikely to be queuing at the ACME loan company’s front door hoping for a low introductory mortgage offer. They pay cash.

Manhattan

Peter Comitini has an excerpt from The Corcoran 2007 report, which is available here. “The year was epitomized by a number of high profile luxury residences, closing at record setting numbers; most notably uptown were Robert A. M. Stern’s15 Central Park West & The Plaza hotel conversion. Further downtown, we saw more sales records achieved by cutting edge projects like Herzog + de Muron’s 40 Bond Street, Jean Novel’s 100 Eleventh Avenue in West Chelsea as well as 40 Mercer Street in Soho; and SOM’s 101 Warren Street in Tribeca. All are among the most significant residential architecture being envisioned and built in the world. Quality design, construction, visionary development, and lifestyle amenities are the essential selling points for luxury buyers in Manhattan. Overall there continues to be a shortage of quality inventory in every price category.”  Of course, Donald Trump has always been of the opinion that you can’t compare Manhattan to the rest of the world, let alone the rest of the country.

London

Average asking prices for prime London property dropped slightly in the last quarter of 2007, immediately rallying in January 2008, pushing the average price up to new record levels. This is in sharp contrast to the rest of London and other parts of the UK. Over 60% of sales of London’s luxury property is to foreign investors, in turn limiting availability hence the continued rises in the face of reductions elsewhere. Record prices for London property were seen in several luxury sectors during 2007. Mostly to overseas buyers who plan to hold on to the property rather than flip it. As recently as 2004, typical ownership length was less than 9 months before re-selling. This has now risen to over 20 months – and continuing to rise. Lev Leviev for instance, paid over $70 million for a seven bedroom house in Hampstead.  

Occasional mention of luxury house prices dropping is made, but, at least in part, this depends on your definition of “luxury,” as applied to the property market. This report from Bloomberg last year suggested that luxury property prices were falling. Notably, this report quotes median prices. Never an accurate indicator.

No, the luxury real estate market is a completely different market, almost unrelated to the loan-based markets. Prices determined by available finance as opposed to available cash are never going to be in step with each other. Whilst the luxury real estate sector may have the occasional blip, the trend seems ever upwards.