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Dubai: The pace of transactional activity in Dubai’s realty space may have slackened in the last five months, but there is still enough going around to keep Gulf-based investors interested. A significant plus is the fact that Dubai has the ready properties — cutting across all categories — for investors to pile in.
Recently, PineBridge Investments Middle East, with its regional headquarters in Bahrain, completed the first close of a GCC-targetted real estate fund after raising more than $140 million (Dh514 million). It is targetting an eventual close of $200 million. The first investment was in a property housing a school in Dubai. Other real estate categories in the emirate are being looked at.
“There are a number of opportunities to invest in specialist real estate assets that generate stable returns and unlock capital for business owners in the GCC,” said Talal Al Zain, CEO of PineBridge Investments Middle East. “The target sectors — logistics, social infrastructure and community retail — are key contributors to economic growth and development of the region, as well as for job creation.”
That’s the crux — there are investments that can be tapped by properties that are ready or will be so shortly, and where the supporting infrastructure is well established. “The infrastructure is what counts with the kind of big-ticket investments GCC institutions or high networth individuals prefer and remains the number one reason why Dubai still retains a decisive edge,” said Abdullah Al Ajaji, CEO of Driven Properties, a consultancy. “So, even through yields have dropped from what it was last year, property values are still going up. The market has been seeing Saudi institutional investors being active in recent weeks and following individual investors who have been busy in the last two years.
“Dubai’s infrastructure edge is also why Saudi investors will take their time getting busy in Qatar.”
That Qatar property’ prospects as an investment will be a slow burn is echoed by Mark Proudley, associate director at DTZ. “Qatar real estate has benefitted from foreign investors purchasing residential units... but on a much smaller scale and predominantly restricted to expatriates who live and work in Qatar. Strategically it is unlikely that will change in the near future.
“In terms of retail investors purchasing apartments for occupational use, Dubai is a high-profile location and an international destination that attracts people, including investors and tourists from around the world.”
Proudley said in contrast, “Qatar has attracted investors from around the region in districts that permit foreign ownership/investment in real estate. An example is the number of residential towers at Pearl Qatar being developed by regional companies. Lusail as a project has also benefited from foreign investment, again mainly from developers within the region.
As such, some local developers are already marking out a presence in Qatar. This includes Damac Properties, which has completed one residential project in Lusail and reached an advanced stage with a serviced apartments venture.
“There are opportunities for UAE based developers in Qatar going forward, particularly at projects like Lusail,” said Proudley. “However, given the upturn in activity in Dubai we anticipate that most will be focusing on projects there.
“A number of large-scale developments that are either completed or being built will appeal to both locals an expatriates including Pearl Qatar, Lusail and Msheireb.It is probably the case that a number of new developments such as Msheireb and Katara do have local heritage at the heart of their vision.”