UAE - Luxury property in Dubai is in high demand, as evidenced by the latest rental deal for a residential property on The Palm Jumeirah.

A four-bedroom penthouse on the iconic man-made island has secured a deal of up to Dh1.7 million for a year's rent, as tenants do not want to miss out on Omniyat One at The Palm Jumeirah, one of Dubai's most exclusive residential developments.

Metropolitan Premium Properties (MPP), a full-service real estate agency and the flagship property company of the Metropolitan Group, completed one of the largest single-unit rental deals in Dubai this year.

In November, a villa on the Palm Jumeirah was leased for six months at a price of Dhs4 million.

On a one-year lease, this equates to a record-breaking Dhs8 million, beating the previous record of Dhs7.5 million set by a villa in Emirates Hills in 2021.

Aleksandr Mylnikov, sales manager at Metropolitan Premium Properties, said the 4,790 sq ft penthouse was a unique option in the building.

"Despite the high rents, this four-bedroom penthouse is in high demand as it offers amazing views of the Palm Jumeirah. The transaction was completed quickly as I represented both the owner and the tenant," he said.

One at Palm Jumeirah is located on the Palm Jumeirah track. It is a new exclusive upscale residential development by Omniyat, a limited collection of 94 exceptional homes managed by The Dorchester Collection.

This ultra-luxurious development was built, designed and crafted by the award-winning Soma Construction Company. It offers three- and four-bedroom flats with modern amenities and incredible views of the Arabian Gulf.

We are seeing more and more enquiries for similar high-end units overlooking the Dubai skyline and the Arabian Gulf," said Mirnikov.

Luxury homes in Dubai are in high demand due to a shortage of top residential villas, penthouses and flats, with high net worth individuals (HNWIs) and millionaires prepared to pay record prices or high rents.

In 2023, only 30,000 new homes are expected to be delivered, including townhouse and villa communities, which has had a knock-on effect on Dubai's most popular rental areas.

While many areas remain well below their peaks in 2014, prime areas including The Palm Jumeirah and Emirates Hills are expected to see the greatest rental growth in 2023.

The penthouse rental deal follows a string of blockbuster deals this year, including a penthouse sold for Dh410 million at Jumeirah Bay Island and a three-bedroom flat sold for Dh13,543 per square foot at the Bulgari Resort and Residences - the highest price per square foot of any property sold in Dubai.

Jumeirah Bay Island is the most popular address for ultra-high net worth individuals (UHNWIs) to invest in Dubai's ultra-luxury property market, according to a study released by penthouse.ae, a luxury property consultancy.

"The most sought-after islands account for 30 per cent of real estate transactions in Dubai's Dhs20 million plus luxury property market segment in 2022," the luxury property consultancy said.

According to real estate consultancy CBRE, the average asking price for a flat on The Palm Jumeirah is over Dh248,092 (US$67,600) per annum and villas rent for Dh1,012,920 (US$276,000) per annum.

Analysts attribute the growth of the luxury market in Dubai to wealthy individuals fleeing the pandemic restrictions elsewhere. Real estate now contributes around 10 per cent to Dubai's overall gross domestic product. After a slowdown due to Covid-19 restrictions, residential sales in Dubai stood at 86,849 units in 2022, surpassing the previous record of 80,831 units set in 2009.