An empty plot of sand on an artificial island in Dubai has sold for $34m, in a record-breaking deal that has made its former owner a 242 per cent profit on the undeveloped property.
The land in question is located on Jumeirah Bay Island, a man-made island accessible by bridge from the Dubai mainland, according to Bloomberg, which reports that the 24,500-square-foot space sold for 125m dirhams on 19 April.
According to the outlet, the sandy property was sold by Umar Kamani, the former CEO of online retailer PrettyLittleThing, who purchased the land two years ago for nearly $10m.
After leaving the plot of land untouched for two years, Kamani sold the property to an unnamed buyer, who doesn’t live in the United Arab Emirates but who reportedly wants to build a family vacation home on the sand, Bloomberg reported.
The sale, which real estate brokerage Knight Frank described as a new high at 5,100 dirhams per square foot, means that the real estate mogul made a profit of $24m just by holding onto the land for two years.
“It’s 125 million for sand,” Andrew Cummings, head of prime residential at Knight Frank in Dubai, told Bloomberg. “Everything that’s been making the press has predominantly been spectacular villas, it’s been incredible penthouses and all this stuff. But this is just a massive record breaker for a land plot.”
The exorbitant purchase price is partly due to the high demand for land on the exclusive horseshoe-shaped island, which is also known as the Bulgari island, and which is home to skyscrapers, luxury hotels and villas, and a yacht marina.
According to one of the brokers who worked on the deal, “because there are such limited options available for people to choose from” on the island, sellers have a lot of control over the prices.
“Sellers are in quite a strong position at the moment to dictate where the prices are, because there are such limited options available for people to choose from, especially beachfront,” Knight Frank’s Lyndsey Redstone said.
The plot of land was also one of just 128 offered on Jumeirah Bay Island by developer Meraas Holding, which stipulated that the plots could not be divided up, according to the outlet, which makes the property even more exclusive.
The nine-bedroom penthouse in Bulgari Lighthouse tower, an apartment building being built on the island, sold for $111m in February.
In addition to the exclusivity of the land, Dubai’s current real estate boom is also due to other factors, such as an influx of Russian customers, according to Katie Burnell, associate director at Savills Middle East, based in Dubai, who previously spoke to the BBC.
“There are a lot of restrictions on Russians on where they can reside or buy property. They face no such problems in the UAE,” she said. “Here they have been able to do business and operate financially.
“Because of this convenience, they are really not focusing on the price point in the property market and are willing to pay the price.”
Others have purchased properties or land in Dubai because of its lack of property tax on owners and the city’s low crime rate, which make it an appealing location for real estate investment.
Kamani, whose father Mahmud Kamani co-founded online retailer Boohoo in 2006, also owns the identical plot of land next to the property he sold, according to Fortune. However, the fashion mogul does not plan to hold on to this land either, which he reportedly plans to sell for 135m dirhams ($36m).
