Jun 6, 2023

Latest in Luxury in the Middle East? $35 Million Bling and Sky Mansions

Lisa Fleisher, Bloomberg News

See what I mean about the Ring Pop comparison? Photographer: Lisa Fleisher/Bloomberg , Source: Sotheby's

(Bloomberg) -- Welcome to Pursuits Middle East, a new biweekly column that takes you inside the region’s fast-growing luxury lifestyle market.

Hi, it’s Lisa. Summer has really, truly arrived in the Gulf, with the temperature in Dubai hitting 109F and humidity making it feel several degrees hotter still. People are starting to leave some of the hotter cities for the summer, although hotels say they’re seeing surprisingly good occupancy relative to the usual summer slowdown. It was in this heat that Five hotelier Kabir Mulchandai finally showed off the private jet he’s going to be offering for charter for guests and nonguests alike. I boarded an exhibition flight with other journalists, and it was a smooth ride, taking off from the Jetex private jet terminal at Dubai’s Al Maktoum International Airport, dipping into Oman air space, and heading back. Here’s more of what I’ve picked up recently.

Dubai Gets Blingier

More of the world’s most expensive jewels, artwork and collectibles are showing up in Dubai so that its growing number of wealthy residents can eyeball the products in person.

“They want to see these stones without having to travel,” says Katia Nounou Boueiz, Sotheby’s head of UAE. “All these pieces go on to Hong Kong, New York—and then Dubai is now one of the stops.”

The latest example was when a 10.57-carat pink diamond ring called the Eternal Pink was put on display at Sotheby’s showroom in Dubai before an auction in New York on June 8. It’s estimated to be worth more than $35 million, the highest price-per-carat diamond Sotheby’s has put up for auction. Alongside it was a 55.22 carat ruby, Estrela de Fura, which the auction house says is the largest and most valuable ruby to appear at auction.

“Asia traditionally has had a quite big collectors of rubies,” says Sophie Stevens, a jewelry specialist at Sotheby’s in Dubai. Indian buyers also like the stone, she says.

Nounou Boueiz says $350 million worth of property has stopped in Dubai in the past six months. On her wish list to bring to Dubai: the Freddie Mercury collection. “It’s a work in progress, but unlikely,” she says, blaming limited timing.

In a sign of the migration patterns of the world’s wealthy, the number of Middle East-based Sotheby’s buyers has increased 107% over the previous year. The auction house tracks buyers by residency status, rather than nationality. It’s not just more Russian or Chinese buyers, Nounou Boueiz says. She is also seeing more interest from clients who are of Indian, Lebanese and Emirati origin.

While more people have been throwing their money into auctions since the pandemic, the surge in the Middle East region is larger than other areas, according to Sotheby’s. The number of first-time buyers from the Middle East and North Africa has increased 273% over the past five years, compared with 150% in Asia. The total number of buyers has increased 57%—with spending up 86%—in the region in that time period, compared with a 73% increase in buyers and a 60% increase in spending in Asia.

One of the perks of having the stones in town is that I got to try them on myself and imagine what it might be like to wear a royal engagement ring. The Eternal Pink was lovely, but it didn’t feel like I was wearing more than half the GDP of Tuvalu on my finger. The ruby, on the other hand, was so large it was cartoonish. In fact, it reminded me of a Ring Pop.

Market Madness

When I visited the construction site of the Jumeirah Marsa Al Arab hotel and residential project in March, I was told that the marina at the base of the property was a huge selling point. This past week, we got a taste of what that means: A yet-unbuilt penthouse sold for 420 million dirhams ($114 million), which broker Luxhabitat Sotheby’s says is the most ever paid for an apartment in the city. The penthouse has a close-up view of the iconic Burj Al Arab—also part of the state-owned Jumeirah Group—and almost 25,000 total square feet, including 17,000 square feet of outdoor space.

Not long after the sale was announced, word came that an even more expensive penthouse had hit the market. The developer of the Bugatti Residences by Binghatti said he would be asking 750 million dirhams for the most luxurious home in the building. It’s one of only nine apartments in the building—sky mansions, they’re being called—that will have car elevators. And the company is getting inquiries already from potential customers, particularly those with ultra-high net worth from Russia and China, Binghatti CEO Muhammad BinGhatti said on the Business Breakfast radio program on Dubai Eye 103.8.

The building site is located notably not on the beachfront but in Business Bay, an inland neighborhood close to the Burj Khalifa that increasingly has become home to ultraluxury developments. Business Bay is the second-most desirable neighborhood for wealthy people from East Asia, according to global real estate consultancy Knight Frank’s new Destination Dubai report, which surveyed 183 people around the world with a net worth of more than $3 million, not including the value of their primary residence. Already in 2023 there have been 88 sales in Dubai of properties worth more than $10 million—the most transactions over that bar globally, according to Knight Frank.

Dubai Casino: Investor Sentiment Positive

Wealthy real estate investors from China and Hong Kong really like the idea of a casino in Dubai. Legalization of gambling in the United Arab Emirates—which could happen any day now, or never—would make people from those regions 67% more likely to buy property in Dubai, according to the Knight Frank Destination Dubai report.

Saudi investors, however, said they’d be less likely to buy property in Dubai should a casino open, the survey said: 60% said they’d be turned off. Across the globe, 34% of the people surveyed said a casino would make them more likely to purchase in Dubai, while 16% said they’d be less likely and 51% said it didn’t affect their thinking.

The potential for gambling is a hot and hugely controversial topic in the UAE. Locally, people are reluctant to even whisper the words “casino” or “gambling,” for fear of upstaging or preempting any decisions by the government authorities. A planned Wynn Resorts property in the Ras Al Khaimah emirate, about an hour north of Dubai, is often referred to as having plans for “gaming,” and requests for clarification are met with silence. (When Saudi Arabia talks about gaming, for example, it means video gaming.) But on investor calls globally, casino executives are less reticent. Wynn CEO Craig Billings referred to “casino component” of the project on the third-quarter 2022 earnings call.

Chinese tourists are seen as key customers for the new Wynn resort, according to Ras Al Khaimah authorities. The $3.9 billion property has plans for 1,500 rooms, which would make it one of the largest hotels in the country.

Jason Atherton’s Dubai

Most celebrity chefs with restaurants in Dubai visit the city maybe once a year, if that, to check on how their franchises are running. Jason Atherton, on the other hand, has a deep history in the city. It’s where he met and married his wife, and he’s worked in Dubai for 20 years. Now he’ll have a 10-episode show on the UK’s ITV network, sponsored by Dubai Tourism, about the city’s restaurants, chefs and budding agricultural industry.

Jason Atherton’s Dubai Dishes, which premieres July 8, will feature chefs and dishes from celebrated restaurants including Folly, Orfali Bros. Bistro and REIF Japanese Kushiyaki. Atherton says in an interview that the show is “based around trying to show people that Dubai is so much more than just shiny hotels and five-star deluxe living.”

Atherton also takes viewers to local farms, which are increasingly providing the kind of fresh produce that wasn’t available in the region 10 or 20 years ago—items as basic as salad leaves. “People have to remember that fresh salad doesn’t really travel,” Atherton says, remembering how difficult it was to put a basic menu item together when he first started in the region. “It was all coming in packets, with chemicals injected into the packets to keep them as fresh as possible during transit. And they’ve traveled from France, Spain, all over Europe. And then by the time it gets to you, it’s four, five days old. You let the gas out of the packet and then you feed it to guests.

“Whereas now it’s grown a couple hundred yards on the outskirts of Sheikh Zayed Road,” he says, referring to the city’s main highway. “That's a really massive step forward.”

He and other chefs put together 40 dishes over the course of the show. Some are the restaurants’ signature dishes, but Atherton says he tried to make his less “cheffy” so people can cook them at home.

More Middle East Luxury News

Six Senses is the first Red Sea hotel to accept bookings for late 2023. Rooms were available for booking online for Dec. 1, starting at $1,800 a night, though a company spokesperson said base price would be about 5,672 riyals ($1,512). (Hotelier)
Why Israel’s archaeologists want everyone to stop digging. (Haaretz)
Saudi Tourism “Rethink Summer” campaign encourages travelers to come even during hot weather (although where have we heard this slogan before?). (Arab News)
Qatar Airways has opened a new Louis Vuitton lounge in the Doha airport (lots of pics here: One Mile at a Time)
I’ve never seen a government office like this one inside the ERTH building in Abu Dhabi. (Agata Kurzela)
Emirati team offers $1.9 million a year to Israeli soccer star Omer Atzili. (i24)

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