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A $1 Billion Golf Course Project Is Luring Americans to the Dubai Desert

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A $1 Billion Golf Course Project Is Luring Americans to the Dubai Desert

Category Chris' CNN

Yet buyers are already snatching up these Dubai properties, which start at $6 million for the land, not including the cost of a new house. The development, Discovery Dunes, is being built with a $1 billion investment from US developer Discovery Land Co., which specializes in high-end residential golf courses and bought the land outright for 1 billion dirhams ($272 million). It is financing the project itself.

The project is Discovery Land’s first in the Middle East, though Founder and Chairman Michael S. Meldman says he’s negotiating a second property purchase in Dubai and is looking at several sites in Saudi Arabia. It’s a long way from Scottsdale, Arizona, where the company is based, but Meldman says he’s been looking for the right place to build in Dubai for more than 15 years.

“I remember seeing Sheikh Mohammed [bin Rashid Al Maktoum, the ruler of Dubai] on 60 Minutes early on, when he was explaining his vision,” Meldman says. “The first time I visited, you could really see what they were talking about and what’s going on there. I always thought Dubai would be one of the great places for Discovery.”

The project is set in an area called Dubai South, very near the city’s secondary airport—and its private jet terminal. Residents will have concierge service arrangements with the terminal, as well as helicopter access to bypass Dubai’s growing traffic jams, Meldman says.

Empty lots are being offered from $6 million to $25 million. Several mid-rise apartment buildings will be built near the clubhouse. Meldman says he expects to bring in about $6 billion in total sales on the 600-acre parcel. Homes will be sold at a cost of about $700 to $1,200 per square foot, and buyers can choose from Discovery Land’s designs or get their own approved.

The company has sold about 10% to 15% of the lots so far, he says—half of them to Americans.

The plots are being sold at a time when demand for luxury real estate in Dubai remains strong but price growth has slowed after a dizzying rise over the past three years. Prices in prime neighborhoods are forecast to rise 5% in 2024, less than this year’s expected 13.5% jump, according to Knight Frank.

Luxury home sales in Dubai remain at high levels. In the first nine months of this year, 277 homes sold for at least $10 million, the most in the world.

“The real key to unlocking the pent-up demand for uber-luxury homes, irrespective of nationality, is to build the stock," says Faisal Durrani, head of Middle East and North Africa research at Knight Frank. “Developers do not appear to be able to build ultra luxury homes quickly enough, and demand continues to far outstrip supply in this exclusive segment of the market.”

US buyers haven’t historically been significant investors in the Gulf property market. In 2019, only 2% of individual investors’ real estate purchases in Dubai were made by people from the US, compared with 16% from India, 7% from the UK and Pakistan, and 5% from Saudi Arabia, according to the Dubai Land Department’s 2020 property report. (Emiratis made up 19% of investors in Dubai.)

Americans moving to the United Arab Emirates don’t reap benefits comparable to those awaiting their counterparts from high-tax regions such as Europe; US citizens are taxed worldwide. A further barrier is distance: Flights from New York take 14 hours, while those from London take about seven.

A private club, Discovery Downtown, opened this month in the Edition hotel near the Burj Khalifa. The club has “comfort stations” with Starburst, Hunter’s-brand chips, Reese’s products and other American candy bars. Unlike other members’ clubs in Dubai, you can’t buy club membership: Doors are open only to people who own properties in Discovery projects worldwide—as well as certain “local influencers” who may be invited to give the place “a little energy and vibe,” Meldman says.

The club includes a restaurant, a small conference room, a lounge area and a room for golf simulation, which can be turned into a movie and media room for kids. In one room, visitors can help themselves to a shot of Casamigos tequila, the brand started by Meldman, Rande Gerber and George Clooney and then sold to Diageo Plc in 2017.

Meldman is bullish on what he describes as a unique product in Dubai: a completely private golf course that you can’t just buy your way onto with a membership; you must buy a home. (Or be friends with a homeowner.)

There are only 30 golf courses in the UAE, according to a 2019 report from the R&A, a Scotland-based golf organization. (Every state in the US but Alaska has more than that, according to the Florida-based National Golf Foundation.) Dubai has only 12 courses for a population of 3.5 million, according to the city’s Department of Economy and Tourism.

Just 340 houses and apartments will be sold on site, making this a relatively small development in Dubai. Dubai’s Emirates Hills—a luxury residential golf course community—includes 600 villas. Others are even larger: Jumeirah Golf Estates has more than 1,800 homes, and Arabian Ranches has 4,500, according to Knight Frank.

Discovery Land will vet potential buyers through a membership application process. “Say they may be sketchy. We just won't invite them into the club,” Meldman says. “Just the fact that it’s a private club—that you have to submit an application with references and things like that—if you're sketchy or a bad person, it’s a pretty good deterrence.” He continues: “Usually, if you're a bad guy, you know you’re a bad guy, and they don't want to go through the embarrassment.”

The company is now starting to build out the eventual golf course, clubhouse, wellness center and spa, and a farm to grow vegetables.

Author Lisa Fleisher, Bloomberg News
Published 17 Dec 2023 / Views -
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