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Iranian investors have already started making approaches on taking possible exposures in Dubai's real estate, according to market sources.
''In the last 48 hours, we have been taking calls from Iranian prospects, who have sounded out the possibility on exposures in locations such as the Downtown and for mid-tier properties elsewhere in Dubai's freehold areas,'' said Juwaad Beg, CEO of Al Madina Al Raeda Real Estate, a developer. ''These are definitely early days, but if the sanctions are lifted in full, Dubai's real estate will be a clear — and immediate — winner from Iranian fund flow into the UAE.''
On whether the Iranian Rial's continued weakness against the dollar will not be a deterrent, Beg said: ''These investors don't care... they have been cut off from the enough investment/asset options for way too long under the sanctions regime. They are good to go the moment these are lifted.
''From a developer or estate agents' perspective, any new funds flowing into the local market would be a huge boost. The market could do with a bit of a lift — sentiments have been volatile for the past three months.''
On what sort of ticket sizes these investors could be looking for in Dubai realty, Beg said: ''Too early to say, but they are likely sitting on quite substantial funds. The second-half of the year could become quite interesting if they get to come in.''
In many ways, Iranian investors would be reacquainting with the local realty market. They were among the first investors to buy in once Dubai launched its freehold programme in the early part of the last decade. But, more recently, their presence have been quite muted as sanctions put a squeeze.
July will give the first indication of whether local real estate sources' optimism is well-founded. By then, the timetable for the sanctions to be rolled back would have been set.
Developers too are watching the situation quite closely. Those with impending off-plan launches could put them off until after July in the hope that substantial Iranian investments will come calling. ''If Iranian funds are going to come in a big way, it's unlikely they will be put off by the prices currently available in the local market,'' said a developer.
''Market values in Dubai have retreated quite significantly from their early-to-mid 2014 peaks … there's lots of value to be had.''
According to Luke Hexter of Luxhabitat, ''Even before the sanctions decision, there were a few Iranian buyers in the market over the recent past, in an on-off sort of way. But once the deal comes through in full, we do expect to see a filtering in of interest in quite a marked way.
''Historically, Iranian buyers, especially high networth ones, have shown a preference for Dubai Marina, while Emirates Hills has been another. They also had a faint smattering of interest for the Palm.''
It remains to be seen what the Iran situation would have on the secondary market for off-plan properties. Some sources believe that owners are likely to pull them off the market now and wait until July/August for the anticipated Iranian boost to come in.
Did you know that Arabs are estimated to invest about $180 billion outside Middle East
Source: Manoj Nair, Associate Editor, gulfnews.com