Dubai’s Property Market Sees Strong International Investor Interest

Dubai’s real estate sector has been witnessing a renewed demand from domestic and overseas buyers, according to real estate consultancy Cluttons.

Bahrain-based Ravi Pillai Group’s plans to invest $1.5 billion in two real estate projects and a $1.9 million investment by Hong Kong-based Chow Tai Food Endowment Industry Investment Development group in two five star hotels have marked a return of institutional investors to the market, Cluttons said.

Emaar’s recently launched Lila and Yasmin communities at the Arabian Ranches development have also garnered strong investor interest.

“Villa communities tend to be limited to a few hundred villas in order to create a sense of exclusivity and deliver on the promise of ‘gated communities’,” said Faisal Durrani, associate – residential and international research at Cluttons.

“We expect to see more such ‘bolt-on’ schemes launched, as developers expand prominent communities and focus on areas that are well established.”

Dubai was ranked as the second most popular real estate investment destination among the world’s wealthy after London, according to a recent Cluttons survey. The emirate ranked seventh in 2012.

“This leap up the league table underscores the impact of the economic rebound on Dubai’s appeal as an investment hot spot,” said Durrani.

“We’re now seeing the results of the survey materialise in the form of high profile deals, which we expect to gather momentum.”

He added that Dubai’s successful bid for Expo 2020 will further attract investors to the real estate sector.

The survey also indicated that high net worth individuals (HNWI) in Oman and Bahrain were more likely to invest in Dubai’s real estate sector in 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,” said Durrani.

“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.”

Dubai is often viewed in the same league as London for real estate investments by Indian property buyers, according to the expert.

“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,” said Durrani.

“And now we’re seeing the demand base broadening from individuals to institutional players.”