Damac to build 2,000-room hotel overlooking Akoya Oxygen golf course
Damac Properties has announced plans to build a five-tower hotel comprising 2,000 hotel rooms overlooking its planned Trump branded golf course at Akoya Oxygen.
The Dubai-listed developer known for its high-profile tie- up with the US president Donald Trump’s golf course operation, is marketing the hotel rooms to investors as off-plan investments at this week’s Arabian Travel Market exhibition.
Off-plan prices for hotel room units in the project start at Dh395,000, payable over five years, according to Damac’s website.
“Investors will be pleased with the opportunity to own a hotel room on an international golf course that reaps higher returns than any other investment classes,” said Niall McLoughlin, senior vice president for Damac. “Owning a hospitality unit provides an attractive return on investment due to the burgeoning tourism industry and potential revenues that can be generated.”
Estimating hotel yields in Dubai is not always straightforward as the idea of selling off individual rooms to investors is fairly new in the region, while existing hotels are often owned by private investors who seldom disclose the prices they paid for the properties.
Last year, Damac marketed freehold hotel rooms in its Aykon City development on Sheikh Zayed Road starting at Dh800,000, saying that they would provide an estimated 10 per cent return on investment.
At the same time Bayut.com reported that studio flats in Dubai Silicon Oasis offered an 11 per cent return, while yields for studio flats in Dubai Sports City stood at 10 per cent.
Cluttons estimated that office yields in Dubai can range from 6.5 to 9 per cent, while workers accommodation can offer yields of between 10 and 20 per cent.
According to Dubai’s Department of Tourism and Commerce Marketing, the number of overnight visitors coming to Dubai last year increased 5 per cent to 14.9 million. However, with the strength of the US dollar making it more expensive for many overseas visitors, the amount of money tourists paid each night fell by about 5 per cent.
And, with CBRE estimating that another 35,000 hotel rooms and serviced apartments are due to be delivered before the end of 2019, analysts expect room rates to continue to fall.
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