Is Emirates Hills the new Jumeirah?
Last week I met the general manager of a major investment management company who is setting up in the Dubai International Financial Centre. He is moving his family to Dubai, so it was a fair question to ask, where did he intend to live?
‘My wife has already decided on The Hattans,’ he replied. These new expatriates will not be alone. Many of the folk who used to set up home in Jumeirah as a matter of course are now moving into the Emirates Hills area. I can name a General Manager of one of the top five international banks, the GM of a global car giant and ex-boss of a credit card company.
So why are senior expatriates shifting towards the Emirates Hills, or more generally the Emirates Living area around the Emirates Hills? For Emirates Hills is a compound for the GCC super-rich and embassies, while Emirates Living is a middle-class suburban sprawl, around two golf courses.
First, many people like a planned community with landscaped streets, an abundance of greenery and fountains, and private security. Jumeirah, by contrast, still has sand between the houses and unsightly huge dustbins strewn around the roads; and house breaks-ins are sadly more common.
Secondly, the quality of construction in the Emirates Living zone is higher than in Jumeirah, where private landlords have haphazardly developed villas with little architectural input besides a brief to squeeze as much as possible on to a small site.
Thirdly, rental prices in the Emirates Living are far below the inflated levels of Jumeirah, which reflect supply patterns of the recent past. Why pay Dhs200,000 a year for a five-bedroom home in Jumeirah, when new-build in The Meadows starts from Dhs115,000?
Fourth, there is the convenience factor. The city of Dubai is growing in the Jebel Ali to Sheikh Zayed Road corridor, and Emirates Living is bang in the middle, while Jumeirah is more suitable for downtown Dubai.
And yet several of the expatriate GMs who have chosen Emirates Hills over Jumeirah actually work downtown, and thus face a lengthy commute. So convenience may not be such a big factor in this location decision.
A final reason for choosing Emirates Living is the availability of the option to buy freehold. For newly arriving expatriates this may not be an immediate possibility, but being in a location where it is possible to buy in the future may be important, particularly to the more affluent expatriates who intend to stay for a long time.
So how long will it be until rents in Emirates Living are higher than in Jumeirah? This is surely the ultimate test of a location.
A reasonable guess is that as soon as the holes in the road are filled and the villas are fully completed and occupied, then Emirates Living will be the next Jumeirah, and rentals will move sharply upwards.