Monday, March 16, 2009

Dubai: Celebrities big losers in Dubai's luxury real estate market

Celebrities, who own elite real estate in Dubai, lose a lot of money due to the plunging prices on the local market, website wrote.

Formula 1 legend Michael Schumacher, who owns the seven-million-dollar Antarctica artificial island in the World Islands project, Brad Pitt and Angelina Jolie, Michael Jackson and several well-known footballers, such as David Beckham and Michael Owen, own elite real estate in Dubai.

Beckham’s and Owen’s property in Dubai loses more than $100,000 of its value every week.

Local real estate agents say that the price reduction occurred presumably in the premium segment. A four-room villa, which was evaluated at $4 million several months ago, is now available for $2 million.

The World is a man-made archipelago of 300 islands constructed in the shape of a world map and located four kilometres off the coast of Dubai, United Arab Emirates. The World is one of several artificial island developments in Dubai. Like the other artificial island projects such as the Palm Islands, The World was built primarily using sand dredged from the sea. Development was by Nakheel Properties and originally conceived by Sheikh Mohammed bin Rashid Al Maktoum, the ruler of Dubai .

Islands in the archipelago range from about 14,000 m² (150,000 square feet) to 42,000 m². Distance between islands is an average of 100 meters. The entire development covers an area 9 km in length and 6 km in width, surrounded by an oval breakwater. Roughly 232 km of shoreline were created. Overall development cost of The World was estimated to be $14 billion USD in 2005. As for individual islands, prices have ranged between $15 and $50 million USD with one island offered for sale at a price of $250 million USD.

The project was unveiled in May 2003 by Sheikh Mohammed and dredging began four months later in September 2003. By January 2008, 60% of the islands were sold, 20 of which were bought in the first four months of 2007. On 10 January 2008 the final stone on the breakwater was laid, completing development of the archipelago. Commercial and residential properties are being constructed on purchased islands.

Published by Mike Hitchen, Mike Hitchen Consulting
Putting principles before profits