A 15 million sq. ft. area at villa community had initially set base price at Dh2.7b

Dubai: The search for a buyer who can pick up 15.33 million square feet – spread over 794 plots – at Dubai’s Falcon City development continues.

Even as the seller slashed the asking price to Dh1.3 billion on the auction site after initially setting the base price at Dh2.79 billion.

“By bringing the asking price to Dh1.3 billion levels, the chances of finding a buyer has increased significantly,” said a consultant. “A price of Dh2.79 billion would have been deemed too steep, which is probably why there were no bids placed. And even when they brought it down to Dh1.9 billion recently.”

The Falcon City is a fairly established community, and received a significant boost in sales in the post-Covid phase when its villas and townhouses recorded a bounce in demand. The one big plus for the location is the existing resident base that the development hosts.

It’s not known whether the auction would only take in a single bid for the entire 794 plots, or whether multiple buyers have a chance to acquired pockets of it.

“This is the single biggest real estate piece that’s come up for auction,” said a consultant. “So, this is unprecedented, and potential buyers will want to know all the pros and cons before committing such a sizeable amount.

“A Dh1.3 billion commitment in Dubai’s booming real estate market for such a big chunk will be a promising opportunity for any buyer.”

Plots already sold
Meanwhile, multiple people have written in to ‘Gulf News’ saying the land being auctioned features plots they had booked for their new homes. Many of them have the SPAs (sales and purchase agreements) and title deeds to show for it. “Will the new owner (of the 794 plots) take over the commitment to complete the unfinished homes and deliver it?” was how one buyer put it.

As said before, these property investors had bought at a time when there was a sustained rush in demand for villas and townhouses after the Covid strike and when a sizeable pool of residents felt they had to move into their own standalone homes.

“Payment terms offered to many of us was pay 50 per cent and get land registered under their name and pay the other 50 per cent upon villa handover,” said another buyer who had bought at Falcon City. “The first few lucky buyers got the land title deed registered in their name and the rest were told about a delay in processing the deed.”

These are just two of the investors who will be looking to the auction process with keen interest. If someone puts up the Dh1.3 billion and buys the 794 plots, what will be the stance towards the existing property owners whose plots are part of the auction?

One thing is clear though – “Under auction rules, none of the past liabilities will pass on to the auction bidder when the transaction is sealed,’ said a consultant. “It will be handed over on an ‘as is’ basis.”

Heavy on auctions
More properties and plots are going on sale via auctions, in keeping with the boom phase of the local property market. For the sellers, typically banks and other lenders holding liens on the asset, it’s a sure-fire way to recoup what they are owed – or most of it, at the very least.

Source: gulfnews.com