Overseas interest in Dubai property market escalates

There is renewed demand from domestic and overseas buyers seeking Dubai property assets and this is a sign of increasing interest in Dubai’s improving real estate market, according to leading international real estate consultancy Cluttons.

Strong interest in Emaar’s newly launched Lila and Yasmin properties at Arabian Ranches, Bahrain-based Ravi Pillai Group’s plans to invest USD$1.5 billion into two real estate projects in Business Bay and Downtown, and the USD$1.9 million investment by Chow Tai Food Endowment Industry Investment Development (Group) Ltd in serviced apartments, high-end residences and two five-star hotels at Dubai Pearl, illustrate the growing appetite for real estate investment from intuitional investors who have been largely absent since the market rebounded.

The recent report on buyer activity released by the Dubai Land Department highlights the appetite for real estate assets in Dubai that extends well beyond the UAE, with 162 nationalities committing to Dubai’s bricks and mortar during 2013.

Indian nationals topped the list of the city’s most active buyers, with Dubai often viewed in the same league as London by this group. The relative geographic proximity to India and the large non-resident Indian population in the region are two further critical drivers for those looking to park their Rupees in Dubai’s real estate market. And now we’re seeing the demand base broadening from individuals to institutional players. Britons and Pakistani nationals rounded off the top three nationalities that purchased property in Dubai last year, Faisal Durrani, Associate – residential and international research at Cluttons said.

This is further evidenced in Cluttons International Private Capital Survey 2013/14 which was released late last year. The survey found that within the region, Dubai ranks ahead of other global real estate investment destinations.

Cluttons surveyed nine global locations across the Middle East and Asia-Pacific region and although London ranked as the go-to investment destination by the world’s wealthy, Dubai came in a close second, up from seventh place a year earlier.

Durrani added: “This leap up the league table underscores the impact of the economic rebound on Dubai’s appeal as an investment hot spot. We’re now seeing the results of the survey materialise in the form of high profile deals, which we expect to gather momentum. The World Expo 2020 win will go further to enhance this, with global investors expected to home in on the city ahead of the exhibition, catalysed by the exponential upturn in government backed infrastructure projects as Dubai readies itself for the mega event in six years’ time.

High Net Worth Individuals (HNWI) from Muscat and Manama ranked Dubai ahead of London, with investors in both locations indicating a high likelihood of investing in the Emirate during 2014. For this group of Gulf-based HNWI, the lifestyle offered through second home ownership and the security offered by Dubai topped the list of investment drivers. Strong capital value gains, attractive yields and the Emirate’s perceived safe haven status all emerged as the most important influencing factors when identifying Dubai as their top global investment pick, Durrani pointed out.