GCC’s Ultra-wealthy Eye Dubai For Property Investment
The UAE emerged as the most popular destination for regional investors
Dubai has emerged as the most attractive city in the Gulf Cooperation Council (GCC) for the region’s wealthy property investors, a new survey by real estate consultancy Cluttons found.
The study, which polled high net worth individuals across the region, found that 63% plan to invest in their preferred real estate locations during Y 2016.
27% identified Dubai among their Top 3 destinations. It was followed by Abu Dhabi (21%) and Sharjah (8%). Doha and Kuwait City rounded off the Top 5.
“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 Y 2015.
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 to 9%.
“We are also witnessing the emergence of worker accommodation as an increasingly popular asset class, which can offer yields of between 10 and 20%.”
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% of the respondents expect to spend over $1-M on an individual property outside their city of residence during Y 2016. A further 18% claimed that they would be looking to invest at least $1.5-M 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.”
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