A Frenchwoman renovates abandoned villas in Dubai to rent them at a high price
Since a few months, Dubai is a UFO in the global real estate landscape, continuing to overheat while almost all international markets slow down or even come to a standstill. However, the emirate is less of an exception for other trends. Here as elsewhere, the search for space and houses (in the absence of truly green spaces) is stronger than ever. And as located land is beginning to become scarce, turning to “old” real estate may prove to be a good solution. Especially since most of these houses or villas are located in areas where foreigners are not allowed to buy, so they are purely rental properties.
Casually, this little corner of United Arab Emirates began its development almost 30 years ago and some buildings are starting to look really faded when they are not abandoned. Based on this observation, the French Khadija el-Otmani decided to embark on the renovation of these buildings to then rent them at a high price. Arrive at Dubaialmost 10 years ago, she first started working in tourist rentals before climbing the ladder at Driven Properties, one of the largest real estate agencies in the city with nearly 350 employees.
A program of 30 homes
Alongside her role as an investment advisor for international clients, she has developed this activity on a personal basis by investing her savings in it, but does not rule out developing it on a commercial basis in the future. His idea is to approach major multi-owners of houses and villas in Dubai to offer them to renovate and manage their properties for 10 years. It carries out the renovation at its own expense and guarantees the owner the payment of a low and fixed rent agreed in advance for 10 years. And it is remunerated by making the rent rise sharply.
For the launch of this activity, she set her sights on a set of 30 homes belonging to the same owner who would hold 4,000 to 5,000 properties. On a property that is deteriorating, the occupancy rates were low, around 40%. The restoration thus boosts the filling while enhancing the heritage. Khadija el-Otmani first got her hands on 24 townhouses (of the terraced house type) with a simple refurbishment (facades, surfaces, kitchens and bathrooms) which has already made it possible to increase to 70% filling. And now, it is tackling the most upscale part with six independent villas located in the Jumeirah Umm Suqeim district.
The goal? Bring services to current standards with a touch of class and individualization. With its teams of interior designers, it has defined three typologies, corresponding to three different “models” of villas, knowing that the local habit is to perfectly duplicate standard constructions. The work in progress concerns 3 villas called London (308 m² with 3 bedrooms) with an all-British charm, 2 villas of the Mykonos type (4 bedrooms, 322 m²) and a villa nicknamed Ibiza (4 bedrooms, 395 m²). Each home is designed as a whole with a strong personality.
As with townhouses, they are sublet for 10 years, as Dubai law allows. But this time, the investments are much greater: around 250,000 euros minimum per villa. The plan is completely revised like the kitchens, bathrooms and air conditioning. Without forgetting the outdoor spaces with the systematic installation of a new swimming pool. The case can be profitable because in the state, these villas posted at 50,000 dollars per year, rented painfully. The owner will earn 20,000 dollars a year for 10 years when Khadija el-Otmani places these renovated homes on the market for an annual rent of 200,000 euros.
Interest for the owner? “It has a building stock whose value has been boosted and this revalues the whole neighborhood which was depreciated because of the view of dilapidated houses, explains Khadija el-Otmani. He will eventually be able to resell them or rent them for a much higher price. And even during the term of the sublease, he can make a mortgage loan to invest elsewhere based on a value that has been significantly revised upwards. A new activity full of prospects according to this real estate agent who would like to expand the formula to bring in other investors.