The World Project- Ireland in Dubai

I attended a beautiful launch party last night in the Four Seasons of a project called The World. Ireland ,one of the islands in the World off the coast of Dubai was offered on sale. (not the whole thing, but apartments etc.)The project is fantastic and unique in many ways.

Property prices started from around €745,000 for one beds and the estimated yields was around 8% and there was also an option to flip contracts. The research provided indicated tourism forecast to be around 20 million by 2015 I believe it was.

My view on Dubai in general is that the market may become saturated with apartments, which may make it difficult to re-sell. The tax free situation is good (You are alway liable at home anyway), however, the financing options is expensive. This project is very unique- especially close to the heart of the Irish investor.

I would like to hear your views on this project as an investment as it is not a 'typical situation'.

AUTO320- What is your thoughs on this

How can you go wrong really? I mean it's not like they're making any more of land... Oooh, hang on a sec!

In fairness though, are they estimating their yields of 8% on current statistics from the market there or is it just pure conjecture? The 1 bedroomed apartment in this scheme would need to be fully occupied year round and command a rental price of around 1200 p/w to achieve that kind of yield.

Sounds like a very optimistic spiel for an unproven market to be honest.

Do you actually own the apartment ?or is leased at the pleasure of the sheik ?It sounds like an over inflated price for an untested market to me . TEMP. in dubai can reach 40-50 degrees c ,not a family destination most of the year i think . Who will pay these massive rents ? I personally think the region is too unstable with inevidable conflict between U.S. and Iran .

It'll be kinda funny going into your travel agent and asking for a flight to Ireland!!

Zulu said:

Property prices started from around €745,000 for one beds and the estimated yields was around 8% and there was also an option to flip contracts.

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Afuera said:

The 1 bedroomed apartment in this scheme would need to be fully occupied year round and command a rental price of around 1200 p/w to achieve that kind of yield.

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Those are astronomical figures that only the most naive could believe.

heres the link to the site
[broken link removed]

they guy selling it was on Ireland AM this morning, he said 8-10% yields and 25% plus appreciation.

The apartments would be run as a five star hotel and the owner would get two weeks free a year, the whole complex is being run on a profit share basis, i.e the bar, spa and rents etc would be pooled and the profits divided up on a pro rata basis......or something along those lines only caught it on the way out the door.

Oh yeah won't be built till 2010 I think he said.

At those yields, I am really surprised the vendors don't hold on to all the apartments themselves........... I guess they want to give something back.

This is fantasy-land stuff. A one bed apartment for €745k with a projected yield of 8% a year? So nearly €5k rent a month if it is rented for the entire year!

With 25% a year capital appreciation, after five years your apartment will be worth €2.3M and if the rent remains the same, will only yield a paltry 2.5%. Alternatively, the rent would have to increase to €15k a month to make as attractive an investment to a new investor.

Regular readers on this forum will know my views on Dubai in general -- its an updated and more sophisticated version of the Florida swampland scam of the 1950s. The marketing of Dubai in Ireland to date has been almost entirely based on projected rentals, in a tourism economy that is almost entirely hotel based. The only high-volume apartments that can be rented in Dubai, and at small rents at that, are the ones rented to low-paid workers in the service sector. The absence of a conveyancing system or proper ownership rights is a factor that is never mentioned by the marketing companies. Buyer definitely beware on this one.

The best way to sell this garbage is to target each country in the "world" at the real version of that country, as in this case. The island of "Ireland" (a pile of sand that barely juts above the level of the sea) was bought by a UK investor as far as I am aware (I am open to correction) and he will then re-sell bits of it to gullible Irish with money burning a hole in their pockets. Promises of high yields and appreciation, and no mention that the whole ownership issue is at the whim of the local sheik, and they will queue up to throw money at it. A further marketing advantage is that the "brag factor" in Irish golf clubs etc will ensure that loads of Irish get in line for this rubbish.

Will it yield 8% pa and 25% appreciation? If you will pardon the vernacular, it will in its hole!

Will it yield 8% pa and 25% appreciation? If you will pardon the vernacular, it will in its hole![/quote]

Thanks for your response. My view on Dubai is the same as auto320, and I do see a real problem happening by 2010 with the oversupply of newly built properties. Fortunately for this project there is only a few units on the only Ireland Island and there will probably we a market to resell to a fellow Irish man in the future. It would be interesting to see how fast this project sell and the profile of the buyers- it is a real cocky purchase.

Looking at the plans there - does the price include a luxury cruiser boat to get you there & back? Why buy one in Ireland - why not Austrailia, Singapore, Spain etc?

Having been to the UAE a long time ago, it's a country literally built on sand.
The most important point about this country is that they (the Sheiks) may say you have ownership today but they can take it away tomorrow. Also what's going to happen in 20 years time when the oil runs out.

To be fair Dubai is no longer reliant upon oil as its economic mainstay - the non oil sector accounts for 95% of GDP according to the FT. However, I do share the reservations that most of the posters here have expressed about property investment in this country.

I do not think, however, that lack of genuine ownership rights is not the main concern - at least not a short term one. The building boom out there is IMHO undoubtedly a bubble.

Personally, I wouldn't touch it for the World

Seriously though, when you purchase property in Dubai, you only own the land it sits on for 99 years after that it goes back to the Sheik. Whilst this is a new development you'll get your full 99 years as opposed to someone else selling the property to you 2nd hand with maybe 88 years left. However, that's a totally ridiculous situation. Would you purchase a property anywhere else, knowing that it had to be handed back including the buildings built on it - I wouldn't imagine you would.

There is also something about one having to be sponsored by a local if you want to be in business there. I'm not sure if this would apply to you as you might be using the services of a letting agency. However I'd check it out as otherwise you have to pay your local sponsor a salary. You have to go to court to get this done so it is all above board and whilst you are doing so, your wife must sit in a separte part of the courtroom as a spectator only and must not speak!!!!!

The other thing is, that area is subject to Tsunamis & earth quakes. Last July, whilst we were on holidays there, everyone was cleared off the beach for the day, because they were expecting a Tsunami to hit. And as you know The World project, is quite a distance from shore, with no boardwalk or links to the shore other than by boat.

A taximan (who always know about these things!) told us that no matter how far they drill down, all that is met is sand and more sand. There is no rock and all the buildings are built on this. He said that they know its a problem but say nothing about it. However the first earthquake to hit again, is meant to cause astronomical damage and they are just waiting for it to happen.

Anyway, all in all, whilst it is ok to visit, I wouldn't be so keen in investing there.

The "Ireland" project is already sold out, although some of this is apparently made up of unts held back for "resale" at higher prices. Remember what I said about the "brag factor" down at the golf clubs? This has definitely helped offload this useless garbage -- one born every minute etc.

Read in a local paper that it's a Galway auctioneer called John O'Dolan and a guy from Larionovo (IIRC) that bought it. They bought the UK there as well.

Edit: sp.

spinal_tap said:

Read in a local paper that it's a Galway auctioneer called John O'Dolan and a guy from Larionovo (IIRC) that bought it. They bought the UK there as well.

Edit: sp.

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Ya i thought John o Dolan was involved as well. I think he owns odolan and partners auctioneers.

BlueSpud said:

At those yields, I am really surprised the vendors don't hold on to all the apartments themselves........... I guess they want to give something back.

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They are developers, they build properties to sell, not to keep.

Great place to go and stay once its built but i wouldnt invest in it.

icecool said:

They are developers, they build properties to sell, not to keep.

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I think that you may have missed BlueSpud's tougue-in-cheek.

In 3-4 years the returns that they are talking about may just be achievable.
However, I am not that impressed with the world project as a whole.
It only vaugely resembles a map of the world, and this was supposed to be the major drawcard.
The transport system is also a worry, and Ireland is not one of the transport hubs.
I might go there for a pint but thats about all.