Business GCC wealthy park funds in UAE cities

Dubai, Abu Dhabi and Sharjah are most popular investment destinations in Middle East UAE cities dominate top GCC investment picks

THURSDAY

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APRIL 7, 2016 dubai — Despite the global and regional economic slowdown this year, a majority of Gulf high net worth individuals (HNWIs) are willing to invest in real estate markets and Dubai is their most favourite place for property investment.

While global locations such as London and New York will always have their place, the rise of Dubai’s property market over the past 14 years has captured the attention of the region’s wealthy.

Dubai, Abu Dhabi and Sharjah emerged as the most popular investment destinations in the Middle East among GCC’s HNWIs, real estate consultancy Cluttons revealed on Wednesday.

Cluttons’ latest Middle East Private Capital Survey, in partnership with YouGov, shows that 63 per cent of GCC HNWIs plan to invest in their preferred real estate locations during 2016. Of those surveyed, 27 per cent identified Dubai in their top three destinations within the GCC, while 21 per cent chose Abu Dhabi and eight per cent selected Sharjah.

“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 value-added tax,” said Steven Morgan, senior partner at Cluttons.

Morgan expects these measures to put a clear squeeze on household finances but for now, the investment sentiment of the region’s HNWIs remains positive, particularly towards the UAE which is seen as somewhat of a regional investment safe haven.

According to data from the Dubai Land Department, GCC nationals were the largest investors in Dubai real estate in 2015, with a total of Dh44 billion being committed over the course of the year. Dubai also emerged as the most preferred location for real estate investment in the Middle East during 2016, based on the findings of Cluttons’ latest research.

Faisal Durrani, head of research at Cluttons, 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 nine per cent. We’re also witnessing the emergence

Most preferred investment hubs in the Gulf are:

Doha

Kuwait city

Riyadh

Muscat

4%

3%

2%

1% 3%

1%1%

9%

1%

1%

1%

14%

3% 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

9%

8%

3%

5% Cluttons’ survey indicated that they were unsure of which specific areas in Dubai they would target for an investment. However, for those who did name specific locations for residential investment, The Springs and Bur Dubai were the most mentioned areas, followed by Deira, Jumeirah Islands and Jumeirah Village. For the office asset class, Deira and Downtown Dubai are most popular, with Bur Dubai and Business Bay coming in joint second.