Hotel apartments most profitable in Dubai

Serviced hotel apartments are the most profitable investment in Dubai right now as tourism levels continue to rise, it is claimed.

Although all sectors in Dubai are experiencing unprecedented growth, investors are keen to seek out the biggest returns, according to Daniel Schon, Vice President of Schon Properties.

The company currently has four projects under development in various sectors. One new area is mixed use which Schon believes will prove popular as commercial rental costs soar. Its Signer project in Jebel Ali has been designed to take the needs of small business into account.

'It will allow people to make use of one space for their business and residential needs,' he said. 'The biggest problem for these people when they move to Dubai is that, because of the rising costs of rent they can never find a place.'

Of the various projects springing up across the city, all are designed to attract investors but he reckons hotel suites are the most profitable at present. 'Serviced hotel apartments are definitely the most profitable, because Dubai is built on tourism. You see the campaigns all around the world,' he said.

'The concept is that all the rent goes into a pool, then an independent auditor distributes the rent equally according to your percentage ownership of the building. It offers very good return with projected yields of up to 20% per year based on 10 year historical information from the Department of Tourism and Commerce Marketing, the inflation rate and so on. We've done extensive research on this and the numbers are phenomenal,' he added.

He scoffed at rumours that the property bubble in Dubai is set to burst. 'We were offered plots in 2002 that we didn't go for because analysts were saying the bubble's about to burst. These are the same reports that are still going around now. Anyone who says that is not looking at the whole picture,' he said.

'Dubai is the centre of the region for property; there are also investors from Iran, Pakistan, and India. Even Chinese groups have started investing here. Everybody wants to be involved.'

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