GCC’s ultra wealthy eye Dubai for property investment

Dubai has emerged as the most attractive city in the Gulf Cooperation Council for the region’s wealthy property investors, a new survey by real estate consultancy Cluttons has found.

The study, which polled high net worth individuals across the region, found that 63 per cent plan to invest in their preferred real estate locations during 2016.

The maximum – 27 per cent – identified Dubai among their top three destinations. It was followed by Abu Dhabi (21 per cent) and Sharjah (8 per cent). Doha and Kuwait City rounded off the top five.

“Dubai’s attraction stems from its ability to offer a world class business environment and infrastructure that is unmatched anywhere else in the Middle East,” the report said.

“Furthermore, the lifestyle available in Dubai through second home ownership is unrivalled in the region, which is a particularly big pull factor for Middle East investors.”

According to data from the Dubai Land Department, GCC nationals were the largest investors in the emirate’s property market in 2015, pumping in Dhs 44bn last year.

Head of Research at Cluttons Faisal Durrani said: “The variety of investment options available in Dubai range from low-end, high yielding residential units in peripheral schemes such as International City and Discovery Gardens, to more sophisticated investment options in the office market, where yields can range from 6.5 per cent to 9 per cent.

“We’re also witnessing the emergence of worker accommodation as an increasingly popular asset class, which can offer yields of between 10 per cent and 20 per cent.”

The majority of respondents to Cluttons’ survey said they were unsure of which specific area in Dubai they would target for an investment.

However, among those who named specific locations for residential investment, The Springs and Bur Dubai were the most popular, followed by Deira, Jumeirah Islands and Jumeirah Village.

For the office asset class, Deira and Downtown Dubai emerged as the top picks.

Overall, the survey found that 61 per cent of the respondents expect to spend over $1m on an individual property outside their city of residence during 2016. A further 18 per cent claimed that they would be looking to invest at least $1.5m in an international property asset.

Senior partner at Cluttons Steven Morgan said: “For the Gulf states as a whole, the oil price decline has certainly put budgets under pressure and has triggered a number of macro policy amendments including the phasing out of energy subsidies and the introduction of VAT.

“We expect these measures to put a clear squeeze on household finances but for now the investment sentiment of the region’s high net worth individuals remains positive, particularly towards the UAE which is seen as somewhat of a regional investment safe haven.”