Jumeirah Garden City

9 square kilometers of redevelopment in the heart of Dubai – flying under the radar. It’s not a secret. But it is surprising how few people know about it. Jumeirah Garden City (JGC) is the strip behind Sheikh Zayed Road, opposite DIFC, Emirates Towers and Trade Center. The area is part of Satwa and being redeveloped by Meraas.

Meraas has developed the infrastructure. However, it is not developing the buildings. Meraas has sold most of the approximately 340 building plots to individual developers.

The area is quite prime, with easy access to DIFC, World Trade Center and Downtown. It is also close to Jumeirah public beach. The buildings are restricted to G+2+8 floors with a few parks in the area, some of which include tennis courts.

Quite a number of projects have started construction and will be handed over between now and end of 2027.

Cheaper alternative to DIFC and City Walk

Most new buildings in JGC are of substantially higher quality than the old buildings they replace. Prices however are lower than in DIFC and City Walk. This makes JGC a lower cost alternative for anyone unable to afford DIFC and City Walk. It can be a good option for junior staff working in DIFC or Sheikh Zayed road or mid-level executives with family and requiring more space.

The closeness to several points of interest, like Museum of the Future, Dubai Mall, Zaabeel Park and Jumeirah Public Beach, makes the location also attractive for short terms rentals.

The pricing of recent launches has increased. While a year ago apartments could be bought at around AED 1,500 per sqft and less, some of the latest launches are 50% higher and more.

Rental market in the area

Property prices always have to be compared to rental rates. Ownership of a property gives the owner the right to either live in it or let it to someone for the duration of the property’s useful life.

Current rentals in Satwa might not be a good comparable, Most buildings are old and of low quality. We have therefore looked at the rentals of higher end properties competing for the same profile of tenant.

Rentals in the towers of Sheikh Zayed Road for decent 1BR apartments range from about 90k to 120k and for 2BR apartments from 110k to 160k. At the higher end we have quite spacious apartments in high end towers, in some cases even serviced apartments. So 120k is about the maximum we would expect as rental income for a new, spacious high end 1 BR unit. As most units are rather small (650 - 800 sqft) AED 100k is probably more realistic. An exception would be Eden House. There large size 1BR apartments were recently rented for above AED 200k per annum. But this is a different category and at a level of luxury unmatched by any other building in the area.

What does this mean for the value of properties in JGC?

Gross rental yields in Dubai are in general around 5-7%. Unless a 1BR in JGC is very large and luxurious, it is difficult to justify a price tag above AED 2m. For an investor buying an offplan unit there needs to be a capital gain at handover, otherwise it is not worth the risk. So, putting this together, an offplan 1BR unit should ideally be below AED 2m. Of course, the quality of the building, size of the apartment and location can justify upwards or downwards adjustments. For example, closeness to Emirates Towers Metro station is a strong advantage. Executives working in DIFC or Emirates Towers would be able to walk to work within some 20 minutes. Many low and mid-level executives in DIFC don’t have their own parking spaces. But walking to work means not only saving parking money (which is quite a lot in DIFC). It also allows for a bit of exercise in the morning instead of spending your time in traffic. The Metro overpass over Sheikh Zayed Road is airconditioned, so the walk doesn’t break a sweat. It also allows young couples to only have one car instead of two and only require one parking space at home.

So why is JGC not as expensive as City Walk?

One could argue that the location of JGC is better than City Walk. It is closer to DIFC, Emirates Towers and Trade Center and about the same distance to the sea. City Walk is closer to Dubai Mall, but not walking distance and if we have to take the car it takes a similar amount of time.

So why is a 1BR at City Walk selling at 2.6 million offplan while in JGC its somewhere between 1.4 and 2m? Well, there are a number of reasons. All are related to the fact that the whole of City Walk has been developed by Meraas, while JGC is being developed by several different developers. So how does this make a difference:

1. Quality - all buildings in City Walk are of consistent high quality, while in JGC some developers build to high end specifications, while others might cut corners.

2. Uniformity – City Walk is a uniform development, while in JGC every building looks different. City Walk, is a brand. People know it and what to expect from it. As apartments are similar, there are more comparable transactions a buyer or seller can look at. This creates a market price and makes it easier to buy and sell. Individual buildings in JGC are in general not known. They are unique. This makes them ‘less liquid’ i.e. more difficult to buy or sell. A willing buyer will not always find a willing seller and vice versa. Also, it is more difficult for buyers or tenants to compare 2BR apartments in two unique buildings than if they look at several 2BR’s in a uniform development.

3. Facilities – The common facilities in City Walk are much more luxurious. Common areas, such as parks are more spacious, and equipment is of higher quality than in JGC.

4. Retail – On City Walk all retail is managed by Meraas. To have successful and vibrant retail outlets, tenants need to be carefully chosen. There are anchor tenants creating footfall, such as groceries stores (e.g Carrefour, Waitrose, etc.), cinemas, popular restaurants, etc. Other outlets benefit from the footfall and are willing to pay a higher rent. If retail is managed by each building owner separately, everyone wants the high paying outlets. Nobody wants the low paying groceries store that bring people to the area. As a result, there is little footfall and good brands are not interested.

Conclusion

In conclusion, Jumeirah Garden City is well located. Especially for people working in DIFC who want to live in their own place but can’t afford an apartment in DIFC. Buildings close to Emirates Towers metro would allow to walk to work and not require an expensive parking place.

As investment, I would advise to be selective. Some of the buildings are very nice and reasonably priced. But I wouldn’t buy into the myth that they will reach City Walk pricing. It’s simply not the same kind of product.

Below is the list of recently launched Projects. Some of these projects are sold out from the developer. However, some might still have availability. Also, premiums on secondary units are not yet very high.

Below is a list of recently launched and upcoming projects:

Good projects always sell out quickly. In case you are interested in buying an apartment in Jumeirah Garden City, please let us put you in touch with a specialist who can secure you the unit best fitting your requirements.

As always, you will not get unwanted calls from pushy agents. The agents we work with are independent from us, go through a stringent continuous selection process and will only contact you in the way and at the time you choose.

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In case you have missed any of our previous issues:

Dubai Islands - One of the hottest seafront opportunities

Dubai South - Dubai strongest growth engine

Villas and Townhouses - Land is getting scarce

Financing Property in the UAE - Smart financing can optimise your return 

If you haven’t yet seen on our social media - we have now included a Home Loan Estimator tool on our website. This allows you to not only estimate the amount of the property value that can be financed, but also the limit of how much home loan banks can give you based on your income.

Stay tuned,

M&M

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