Azizi Developments is opening its first serviced apartment project in Dubai.
The Dh460-million Candace project is located in the Al Furjan district of Dubai, close to Jebel Ali.
The residences are expected to be ready by the third quarter of 2017. They will be operated by Candace Hotel and Resorts, which is registered in the UK and the UAE, in which Azizi is an investor.
There are more than 29,000 hotel apartments and serviced apartments in Dubai, and only 36 per cent of the supply is internationally branded, according to the research firm Colliers International.
The average occupancy at serviced apartments was about 80 per last year, up from 79 per cent in the previous year. The average daily rate last year was about Dh430, down from Dh459.
“Because of a high number of unbranded properties in Dubai, standardisation is lacking within serviced apartments, as opposed to hotels in the city,” said Filippo Sona, the head of hotels for the Middle East and North Africa region at Colliers.
The developer has also lined up serviced apartment projects worth Dh1.8 billion in Dubai Healthcare City, Palm Jumeirah and more in Al Furjan. The group plans to launch more than 2,000 serviced apartments in these areas by the end of this year, which will be managed by Candace.
“The number of tourists coming to Dubai has been increasing drastically and hotels are pretty occupied,” said Farhad Azizi, the chief executive and vice chairman of Azizi Developments.
Azizi also plans to enter the holiday home segment.
Most of the investors at Candace at Al Furjan include those from the Arabian Gulf region, India and Pakistan, with 70 per cent of them cash buyers, he said.
At Candace at Al Furjan, the company is expecting a 10 to 12 per cent return on investment from 2017. The serviced apartments will be positioned in the “superior” category, which is between the standard and deluxe categories in the serviced apartments segment.
Users and investors can rent out their property or avail services of Candace Hotel and Resorts to manage it for them.
Azizi has sold 80 per cent of the residences at one of the two towers in the project, and 25 per cent in the other, according to Mr Azizi. The two towers have 543 units.
The studios at Candace start at Dh433,000 and the prices can go up to Dh1.2m for a two-bedroom apartment.
Azizi expects to deliver eight other residential projects at Al Furjan this year.
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