Buying room space in a hotel that has not been built, when even property experts are unsure of the risk, might seem either very bold or very foolish.
But Saeed Currimjee, the managing partner of Al Jabal Real Estate and Al Jabal Holdings, a Dubai-based real estate developer, has already tested this type of property investment and is promoting its potential, even at a time when the hotel industry itself is bracing for the impact of a global recession.
Back in 2005, Mr Currimjee had reservations about the real estate market, or "bubble" as he described it, and decided to invest in a "buy-to-let" hotel property, which was part of The Cove project, a beachfront resort developed by Egypt's Orascom Hotels and Development in Ras al Khaimah (RAK).
"I bought a beachfront villa, which would be let out because I didn't want to take the risk of the highly unpredictable property market," says Mr Currimjee. "And during the process of buying the property, I was a first-hand witness to the high level of demand this concept was generating."
Today, several regional property developers are following Orascom's lead and are introducing the buy-to-let hotel concept to the UAE to woo investors wary of the impact of the global economic slowdown.
"This is a good time to be introducing these projects where the risk factor is less of an issue because the project will be managed by a well-known hotel group, increasing the chances of higher returns," says Mr Currimjee.
Last month, Al Jabal Real Estate announced plans to develop a 500-room hotel in Ajman and will soon offer investors an opportunity to buy hotel rooms under a deal that sees their returns based on occupancy levels, says Mr Currimjee. "If you buy a house today and rent it out, your investment return would be in the range of 5 per cent to 8 per cent, but if the hotel has 60 per cent occupancy, the investor's returns would be in the range of 16 per cent."
The Crescent Star is a 33-storey, four-star hotel-apartment property in Ajman's Marmooka City, a 30-minute drive from Dubai airport. The project's management expects it to be completed in 40 months and has invested about US$80 million (Dh293m).
Earlier this year, Al Jabal Real Estate launched Crescent Towers, which includes three 18-storey towers, also in Marmooka City, and is slated for completion by 2011. "The reason we are developing properties in Ajman is because it is five times cheaper than it is in Dubai," says Mr Currimjee.
To buy into the hotel costs from Dh547,500 for a 520 square foot room to Dh1 million for a 2,000 sq ft room. "The rooms are fully furnished and WiFi is free of charge," says Mr Currimjee, adding that there are no limitations on foreign investors. The hotel plans to offer all the facilities normally found in a four-star property, including meeting areas, a pool, health centre and retail shops.
However, many people still confuse buy-to-let with timeshare, which are different concepts. "With timeshare you don't get a return on your investment, you just get time slots where you can spend your holiday in a certain destination," he explains. "The concept of buying a hotel room to let is not new, it has been around for years in Europe, and right now in Dubai there are a handful of companies that have offered it."
These investment schemes are also available in the UK, Spain, Germany and Portugal - with varying claims of success. Most analysts believe that the concept is relatively new on a global level and to some extent untested.
"It is too early to judge the long-term prospects, there are several projects under way, some are believed to be on hold because of the credit crisis and we recently saw Guestinvest in the UK go into administration," says Rohit Talwar, the chief executive of the UK-based hospitality consultancy Fast Future.
"The company had bought five luxury London hotels at the height of the boom in the UK property market and invested heavily in refurbishment. It then got into trouble because of financial difficulties at HBOS - the bank that was its lead investor and debt financier."
Mr Talwar says other developers claim they have a different business model and are more robust - but the reality is that they still depend on hotel guests and leisure users to provide the returns to room investors. "And these markets are expected to get a lot worse before they get better."
An official at RAK Investment, which partly owns the The Cove project, says the concept is proving successful in the UAE, as the 70 villas the project was offering under buy-to-let contracts have sold out.
"The main reason we decided to adopt this concept is because the hotel we have in the project has 200 rooms and we know that demand is going to be high, given the fact that this is the only complete project in RAK and the villas would add about 140 rooms to the property," he says.
But unlike the Orascom deal, which states that if the owner of the room decides to use it for four weeks of the year then there would be a guaranteed 7 per cent return on the investment for the remaining 11 months, Al Jabal Real Estate does not guarantee a rate of return.
"Our conditions are a bit different because we know that 7 per cent return is not that appealing. That is why the returns will depend on the occupancy rates," says Mr Currimjee.
After three years, Orascom also offers owners the option of either residing at their property or selling it back to Orascom at the market value while taking advantage of a fixed capital appreciation, or renewing the agreement with the company to continue receiving guaranteed returns on rent.
Mr Currimjee says: "We do want to discourage flipping of property - which is very common here in the UAE, when investors buy a property for a few months and resell it - but at the same time there are no restrictions on when he can sell."
Al Jabal Real Estate is finalising a contract with a hotel management company to run the hotel. "The management company will take a share in the profits, and the rest will be equally divided by the room owners, so no matter how many times your room has been occupied you would still get an equal share."
The plan may seem a good deal for investors, but analysts are still wary of the industry's prospects in the coming two to three years.
"Despite the bravado of some Middle East hotel owners and operators, the reality is that we will almost certainly see the downturn hit the hotel sector quite hard and drive down demand and average revenue per room night," says Mr Talwar. "This is already happening to hotels all over the world. This could make the financial returns on buy-to-let hotel rooms look less attractive, or indeed very risky."
abakr@thenational.ae
The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
KEY%20DATES%20IN%20AMAZON'S%20HISTORY
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Scotland v Ireland:
Scotland (15-1): Stuart Hogg; Tommy Seymour, Huw Jones, Sam Johnson, Sean Maitland; Finn Russell, Greig Laidlaw (capt); Josh Strauss, James Ritchie, Ryan Wilson; Jonny Gray, Grant Gilchrist; Simon Berghan, Stuart McInally, Allan Dell
Replacements: Fraser Brown, Jamie Bhatti, D'arcy Rae, Ben Toolis, Rob Harley, Ali Price, Pete Horne, Blair Kinghorn
Coach: Gregor Townsend (SCO)
Ireland (15-1): Rob Kearney; Keith Earls, Chris Farrell, Bundee Aki, Jacob Stockdale; Jonathan Sexton, Conor Murray; Jack Conan, Sean O'Brien, Peter O'Mahony; James Ryan, Quinn Roux; Tadhg Furlong, Rory Best (capt), Cian Healy
Replacements: Sean Cronin, Dave Kilcoyne, Andrew Porter, Ultan Dillane, Josh van der Flier, John Cooney, Joey Carbery, Jordan Larmour
Coach: Joe Schmidt (NZL)
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Game Changer
Director: Shankar
Stars: Ram Charan, Kiara Advani, Anjali, S J Suryah, Jayaram
Rating: 2/5
AUSTRALIA SQUAD
Steve Smith (capt), David Warner, Cameron Bancroft, Jackson Bird, Pat Cummins, Peter Handscomb, Josh Hazlewood, Usman Khawaja, Nathan Lyon, Shaun Marsh, Tim Paine, Chadd Sayers, Mitchell Starc.
The specs
Price, base / as tested Dh960,000
Engine 3.9L twin-turbo V8
Transmission Seven-speed dual-clutch automatic
Power 661hp @8,000rpm
Torque 760Nm @ 3,000rpm
Fuel economy, combined 11.4L / 100k
The smuggler
Eldarir had arrived at JFK in January 2020 with three suitcases, containing goods he valued at $300, when he was directed to a search area.
Officers found 41 gold artefacts among the bags, including amulets from a funerary set which prepared the deceased for the afterlife.
Also found was a cartouche of a Ptolemaic king on a relief that was originally part of a royal building or temple.
The largest single group of items found in Eldarir’s cases were 400 shabtis, or figurines.
Khouli conviction
Khouli smuggled items into the US by making false declarations to customs about the country of origin and value of the items.
According to Immigration and Customs Enforcement, he provided “false provenances which stated that [two] Egyptian antiquities were part of a collection assembled by Khouli's father in Israel in the 1960s” when in fact “Khouli acquired the Egyptian antiquities from other dealers”.
He was sentenced to one year of probation, six months of home confinement and 200 hours of community service in 2012 after admitting buying and smuggling Egyptian antiquities, including coffins, funerary boats and limestone figures.
For sale
A number of other items said to come from the collection of Ezeldeen Taha Eldarir are currently or recently for sale.
Their provenance is described in near identical terms as the British Museum shabti: bought from Salahaddin Sirmali, "authenticated and appraised" by Hossen Rashed, then imported to the US in 1948.
- An Egyptian Mummy mask dating from 700BC-30BC, is on offer for £11,807 ($15,275) online by a seller in Mexico
- A coffin lid dating back to 664BC-332BC was offered for sale by a Colorado-based art dealer, with a starting price of $65,000
- A shabti that was on sale through a Chicago-based coin dealer, dating from 1567BC-1085BC, is up for $1,950
In numbers
1,000 tonnes of waste collected daily:
- 800 tonnes converted into alternative fuel
- 150 tonnes to landfill
- 50 tonnes sold as scrap metal
800 tonnes of RDF replaces 500 tonnes of coal
Two conveyor lines treat more than 350,000 tonnes of waste per year
25 staff on site
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
The biog
Hometown: Cairo
Age: 37
Favourite TV series: The Handmaid’s Tale, Black Mirror
Favourite anime series: Death Note, One Piece and Hellsing
Favourite book: Designing Brand Identity, Fifth Edition
In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
Famous left-handers
- Marie Curie
- Jimi Hendrix
- Leonardo Di Vinci
- David Bowie
- Paul McCartney
- Albert Einstein
- Jack the Ripper
- Barack Obama
- Helen Keller
- Joan of Arc
The major Hashd factions linked to Iran:
Badr Organisation: Seen as the most militarily capable faction in the Hashd. Iraqi Shiite exiles opposed to Saddam Hussein set up the group in Tehran in the early 1980s as the Badr Corps under the supervision of the Iran Revolutionary Guards Corps (IRGC). The militia exalts Iran’s Supreme Leader Ali Khamenei but intermittently cooperated with the US military.
Saraya Al Salam (Peace Brigade): Comprised of former members of the officially defunct Mahdi Army, a militia that was commanded by Iraqi cleric Moqtada Al Sadr and fought US and Iraqi government and other forces between 2004 and 2008. As part of a political overhaul aimed as casting Mr Al Sadr as a more nationalist and less sectarian figure, the cleric formed Saraya Al Salam in 2014. The group’s relations with Iran has been volatile.
Kataeb Hezbollah: The group, which is fighting on behalf of the Bashar Al Assad government in Syria, traces its origins to attacks on US forces in Iraq in 2004 and adopts a tough stance against Washington, calling the United States “the enemy of humanity”.
Asaeb Ahl Al Haq: An offshoot of the Mahdi Army active in Syria. Asaeb Ahl Al Haq’s leader Qais al Khazali was a student of Mr Al Moqtada’s late father Mohammed Sadeq Al Sadr, a prominent Shiite cleric who was killed during Saddam Hussein’s rule.
Harakat Hezbollah Al Nujaba: Formed in 2013 to fight alongside Mr Al Assad’s loyalists in Syria before joining the Hashd. The group is seen as among the most ideological and sectarian-driven Hashd militias in Syria and is the major recruiter of foreign fighters to Syria.
Saraya Al Khorasani: The ICRG formed Saraya Al Khorasani in the mid-1990s and the group is seen as the most ideologically attached to Iran among Tehran’s satellites in Iraq.
(Source: The Wilson Centre, the International Centre for the Study of Radicalisation)
The National Archives, Abu Dhabi
Founded over 50 years ago, the National Archives collects valuable historical material relating to the UAE, and is the oldest and richest archive relating to the Arabian Gulf.
Much of the material can be viewed on line at the Arabian Gulf Digital Archive - https://www.agda.ae/en
UAE currency: the story behind the money in your pockets
How it works
Booklava works on a subscription model. On signing up you receive a free book as part of a 30-day-trial period, after which you pay US$9.99 (Dh36.70) per month to gain access to a library of books and discounts of up to 30 per cent on selected titles. You can cancel your subscription at any time. For more details go to www.booklava.com
The past winners
2009 - Sebastian Vettel (Red Bull)
2010 - Sebastian Vettel (Red Bull)
2011 - Lewis Hamilton (McLaren)
2012 - Kimi Raikkonen (Lotus)
2013 - Sebastian Vettel (Red Bull)
2014 - Lewis Hamilton (Mercedes)
2015 - Nico Rosberg (Mercedes)
2016 - Lewis Hamilton (Mercedes)
2017 - Valtteri Bottas (Mercedes)
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
UPI facts
More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions
Her most famous song
Aghadan Alqak (Would I Ever Find You Again)?
Would I ever find you again
You, the heaven of my love, my yearning and madness;
You, the kiss to my soul, my cheer and
sadness?
Would your lights ever break the night of my eyes again?
Would I ever find you again?
This world is volume and you're the notion,
This world is night and you're the lifetime,
This world is eyes and you're the vision,
This world is sky and you're the moon time,
Have mercy on the heart that belongs to you.
Lyrics: Al Hadi Adam; Composer: Mohammed Abdel Wahab
From Europe to the Middle East, economic success brings wealth - and lifestyle diseases
A rise in obesity figures and the need for more public spending is a familiar trend in the developing world as western lifestyles are adopted.
One in five deaths around the world is now caused by bad diet, with obesity the fastest growing global risk. A high body mass index is also the top cause of metabolic diseases relating to death and disability in Kuwait, Qatar and Oman – and second on the list in Bahrain.
In Britain, heart disease, lung cancer and Alzheimer’s remain among the leading causes of death, and people there are spending more time suffering from health problems.
The UK is expected to spend $421.4 billion on healthcare by 2040, up from $239.3 billion in 2014.
And development assistance for health is talking about the financial aid given to governments to support social, environmental development of developing countries.
Specs
Engine: 51.5kW electric motor
Range: 400km
Power: 134bhp
Torque: 175Nm
Price: From Dh98,800
Available: Now
The specs
Engine: Long-range single or dual motor with 200kW or 400kW battery
Transmission: Single-speed automatic
Max touring range: 620km / 590km
Price: From Dh250,000 (estimated)
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SPECS
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Company%C2%A0profile
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