Imperial Avenue: a profitable resale in Downtown Dubai

13 January 2024 · Oleg Svyatenko, RERA broker

Imperial Avenue is a Downtown tower that most international buyers have never heard of, built by a contractor most of them have never heard of either, and it has quietly been one of the better resale performers in the district. This is a long walk through why — and the method transfers to any Downtown resale you are considering.

Who is the developer?

Shapoorji Pallonji is a 150-year-old Indian construction group. It built large parts of Mumbai, it built for the Sultan of Oman, and in the Gulf it is far better known as a contractor than as a developer.

Imperial Avenue is its own Downtown project rather than something it built for somebody else.

That matters for a specific reason: a contractor-developer builds to its own construction standard rather than to the lowest tender. The structural and MEP quality in this building is a step above what the sales price implied at launch, and buyers who inspected it noticed.

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The flip side is brand recognition. An international buyer searching "Downtown Dubai apartment" searches Emaar, Address, Burj. They do not search Shapoorji Pallonji. That gap between build quality and brand recognition is exactly where value hides.

Why did the resale perform?

Three reasons, in order of importance. First, the entry price at launch was below comparable Downtown stock because the developer had no brand premium to charge — so buyers entered below the district average and the market subsequently priced the building on its location rather than its badge.

Second, Downtown itself has essentially stopped adding supply. When the district has no more land, existing stock reprices upward over time simply because demand keeps arriving and nothing new does.

Third, the specification held up. A building that still looks good five years after handover holds value; one where the lobby is tired and the lifts are unreliable does not, regardless of address.

How do you evaluate any Downtown resale?

Start with the registered transaction history for the specific tower over twenty-four months, from the Dubai Land Department.

Look at the trend, not just the level, and look at the spread between the cheapest and dearest transaction of the same unit size — a wide spread usually means orientation is doing the work.

Then get the service charge history. In Downtown this is the number that separates good buildings from bad ones over a holding period, and it is public information to any owner.

Then walk the building on a normal weekday rather than at a viewing appointment. Look at the corridors on a random floor, the state of the pool at 4pm, the lift waiting time, and how the security desk operates.

Then look at what proportion of units are holiday lets. A high proportion means a transient population, more wear on common areas, and a different living experience — which matters both if you will live there and if your tenant will.

What is the Downtown supply picture?

The masterplan is substantially complete. New residential supply in Downtown proper now arrives in small increments on infill plots rather than in the thousands of units per year that characterised the district a decade ago.

Demand, meanwhile, has broadened: Dubai’s population growth has been sustained, the golden visa has increased the number of buyers holding long-term, and the short-let market keeps a floor under central apartment values.

That combination — fixed supply, growing demand — is why Downtown resale has behaved the way it has, and it is a structural argument rather than a momentum one.

Where are the risks?

Service charge inflation is the main one. In older Downtown towers the charge has in several cases risen faster than achievable rent, quietly compressing net yields for owners who were not paying attention.

Building management quality is the second. A weak owners association and a passive management company can let a good building degrade in five years, and the resale market notices immediately.

And concentration risk in the short-let market: if regulation of holiday homes tightened materially, the Downtown units configured for that market would need to find long-term tenants at lower rents. That is not a prediction, it is a scenario worth having an answer to.

What was the price gap in numbers?

At the briefing a one-bedroom was quoted at about $684,000, which worked out at roughly $8,420 per square metre, and the most expensive stock in the building ran to about $9,910.

A comparable Downtown off-plan tower — already sold out — was at about $12,600 per square metre. That is a gap of at least thirty per cent for a building that was finished rather than drawn, which is the whole resale argument in one comparison.

The same unit line on the nineteenth floor was quoted AED 250,000 below the seventeenth. That is the reason to compare per square metre rather than by headline price: within one stack the cheapest price per metre was on the higher floor, and it was the unit that would sell first.

Add the payment structure: sixty per cent payable after handover across two years. On a completed Downtown building that is rare, and it is worth as much to a buyer's cash flow as several per cent off the price.

One eligibility point from the same briefing needs confirming rather than assuming. The developer took post-pandemic financing from the European Bank for Reconstruction and Development, and the lender's screening of buyers restricted who could purchase in the tower. Check your own eligibility with the developer before reserving.

What would you do with this information?

Look specifically for well-built Downtown towers with weak brand recognition. That is where the value gap between construction quality and price sits, and it is a repeatable pattern rather than a one-off.

Prioritise the service charge history over the finish of the show apartment. One of those affects your return every year for as long as you own it; the other is a room you will repaint.

And be willing to buy a building nobody has heard of, provided you have physically inspected it and read the numbers. The premium for a familiar name is real money and it does not come back to you on exit.

Frequently asked

Who is the developer of Imperial Avenue in Downtown Dubai?

Shapoorji Pallonji, a 150-year-old Indian construction group better known internationally as a contractor than as a developer. Imperial Avenue is its own Downtown Dubai development.

How do I check past sale prices for a building in Dubai?

The Dubai Land Department publishes registered transactions, searchable by building. That data — not portal asking prices — is the benchmark for judging whether a resale is priced correctly.

Is Downtown Dubai still adding new supply?

Very little. The masterplan is substantially built out and new residential units now arrive only on small infill plots. That constrained supply is a large part of why Downtown resale values have held up.

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