The Maldives government has appointed Mohamed Alabbar, known for developing Downtown Dubai and the Burj Khalifa, to lead a significant real estate initiative.
The $20B “Maldives Waterfront and Marina” project will be implemented by Alabbar’s Eagle Hills and Emaar companies, aiming to attract wealthy foreign buyers. Eagle Hills, chaired by Alabbar, formalised commercial terms with the Maldives government on Monday.
This venture represents the Maldives’ first substantial foray into Dubai-like development and will enhance its already extensive tourism sector.
Project Breakdown
The project will encompass 500 hectares of reclaimed land at Ras Malé, an area two-and-a-half times larger than Downtown Dubai.
Abdulla Muththalib, the Maldives’ minister of infrastructure, indicated that the nation requires “a second engine besides tourism.” The proposed model mimics Dubai’s approach to property sales, featuring homes sold pre-construction, with all transactions processed through escrow accounts to secure investors’ funds.
The Maldives, consisting of nearly 1,200 islands and a population of 500,000, boasts over 1,300 tourism establishments, predominantly guest houses and resorts, as reported by the ministry of tourism and civil aviation.
Government Commission
For this development, the government will receive 10% of commercial sales revenue and a 4% fee on all transactions, including resales, with no tax exemptions being offered.
Alabbar remarked that large-scale projects typically span 10 to 15 years, although substantial progress has been achieved in similar initiatives in Dubai within seven years.
Dubai-Maldives
Details regarding the number and pricing of units have yet to be disclosed, but they are expected to be high-end, with the Maldivian government aiming to introduce branded homes, which can command a premium of 30% in Dubai.
Buyers will secure leasehold agreements for up to 99 years, renewable upon each sale or inheritance.
According to Alabbar, prospective buyers are typically UHNWIs who are likely to acquire multiple properties in major cities including Dubai, London, and Singapore. Eagle Hills’ international track record has been mixed, with various projects yielding different results.
In Dubai, Emaar Development reported AED 22.4B ($6B) in property sales in the first half of the year, reflecting a 45% decrease although profits increased by 43% due to a backlog valued at nearly $35B in sold homes.
Emaar’s stock has declined by 18.5% year-to-date.
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