Property: Office Space Year built: 2010 Area in sq. feet: 1,410.07 Price in USD: $937,332

+         Office space in prime Dubai business place, 5 minutes afoot from WORLD FAMOUS LEGENDS:

§         Burj Dubai – the tallest tower in the world;

§         The Dubai Mall – the biggest shopping mall in the world, recently opened. Forethought as home to just about every major fashion brand. Some of entertainments includes:

Dubai Aquarium - one of the of the largest tanks in the world featuring the world’s largest viewing panel at 32.8m wide and 8.3m high. Over time, Dubai Aquarium will have more than 33,000 living animals, including over 400 sharks and rays combined;

Dubai Ice Rink (larger than life Olympic-size proportions);

Kidzania - a city made for children and run by them. A place where they fly the aeroplanes, they drive the buses and they work in the restaurants. A world where children are free to live out their dreams.

§         Close proximity to Business Bay metro station.

+         The only office with 75%-upon-completion payment terms in Business Bay (out of 230 towers!).

+         Construction is financed by Barclays Bank (30% stake belongs to Abu Dhabi royal family member and Qatar sovereign wealth fund) and Al Ahli Bank;

+         Construction is in progress. Escrow bank accounts were opened. My payments will be kept with the escrow bank.

+         664.21 USD sqft for the office in the business prime location, alongside the World Famous Legends. 1,411.71 – 2,146.68 sqft gross.

§         254,398 USD are due now,

§         99,764 USD – 01.01.2009.

§         748,230 USD upon completion (2010, est. end of 2010).

+         Rent yield is around 13% based on today’s rates (90 USD sq ft p.a). It should be taken into account:

§         UAE economy will grow let slower then before because of the global slowdown, but stronger than developed countries (USA, UK, Germany, France, Italy; based on IMF forecast for the coming 5 years);

§         Current rates are 2-3 times less then compatible (city centre) rates in New York, London, Moscow, Tokyo;

§         Rent income, personal or corporate income are not imposed taxes in Dubai;

§         Vacancies rate for commercial space is around 0% in Dubai. The market is significantly undersupplied for the moment.

§         Global liquidity squeeze leads to decrease of new supply. What is to owners’ favor.

§         These years are ones of peak inflation. Average inflation since 1980 is 5,2%. IMF 2009 forecast – 10,8% (will ease in 2-3 years). If we calculate future cash flows based on today’s rent, we actually calculate starting from rent decline assumption (real value). If we consider at least 5,2% rent growth p.a. (inflation), rent yield 2012 will be 14,6%.           

+         GPD Investments (the developer) informed Dubai Islamic Bank confirmed the finance for the project. Up to 70% of the market value, 7,5% p.a. for non residents (Sep 08). If the finance is obtained (the bank will check documents about a salary (for natural person) or company audit reports (for corporates)), then (we put today’s rent for 2012, then 5,2% rent growth p.a.):

§         Simple payback will be 2015;

§         Rent yield cash-on-cash 2016 – 56%+.

+         Rent yield accumulative 2020: today’s rent – 1,496,460 USD; considering 5,2% average growth since 2012 – 2,217,513 USD.

+         GPD Investments informed Ral Al Khaimah authorities have bought 2 floors in the same building.

In uncertain nowadays, let us come back to basics.

Biggest economies thirst for liquidity. Reserves and external debt, respectively: USA – 71 and 13,704 billions USD (19,301%), UK – 69 and 10,450 billions USD (15,145%), Germany – 143 and 3,647 billions Euro (2,550%), France – 113 and 3,484 billions Euro (3,083%).

UAE external debt is 170 billions USD (middle of 2008; Fitch).

Six GCC countries have accumulated 750 billion USD over the last five years in current account surpluses (Merrill Lynch).

Abu Dhabi (UAE capital) sovereign wealth fund amounts 875 billion USD (the biggest fund in the world). It was also them, whom Gordon Brown, UK Prime Minister, asked to help UK and IMF bailout fund. “The Gulf states will have a vital role to play in agreeing the plans to get the world economy moving again” – he said.

IMF expects that oil and gas exports from the Middle East and Central Asia will amount to 1.1 trillion USD this year. 

At an oil price of 70 USD a barrel, the six nations of the GCC would earn a cumulative 6.2 trillion USD by 2020 (McKinsey).

Now it remains to people abroad to hope their government will work out something and solve problems. But government success is often about its particular persons skills. Dubai is being ruled by the brilliant Ruler. H.H. Sheikh Mohammed Bin Rashid Al-Maktoum, continuing the undertaking of his brilliant father and brother, has successfully transformed Dubai into the region trading hub, tourism, construction and finance centre; the place the world talk about. He has PROVED himself as a brilliant and successful businessmen and ruler.

Dubai offers attractive terms for business – unique combination of  tax-free and prestigious international image. Plus modern infrastructure etc.

Dubai is world-known, liberal and one of the world safest place for living (times safer then Europe and most developed countries).

Investments into emerging markets are often combined with high corruption and political instability risk. Dubai is strongly political centralized and stable.