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Many of the UAE’s most iconic landmarks and buildings were first planned and created on the plotting tables of UK designers and engineers.
The UK-based Atkins, one of the world’s leading architecture, engineering and building design firms, is responsible for the design of the Burj Al Arab and nearby Jumeirah Beach Hotel, both among Dubai’s most renowned landmarks. In Abu Dhabi, the Capital Gate Adnec Tower, the world’s furthest-leaning tower, was designed and engineered by Edinburgh-based firm RMJM. The under-construction Pentominium in Dubai Marina, which would be the tallest residential building in the world and second-tallest building in Dubai after the Burj Khalifa, is a creation of UK-founded Aedas, one of the five largest international architectural firms. Notably, Aedas also shaped the iconic Dubai Metro stations, whose design is based on a pearl.
There are many more examples of UK architectural excellence in the UAE and, for that matter, in other GCC countries. A number of UK-based civil engineering firms, project developers and construction companies are also heavily engaged in the Gulf property sector. However, it is not that the British are just designing buildings in the UAE; they also want to live or invest in them.
British nationals are the second most active property buyers in Dubai, behind Indians and ahead of Pakistanis, data from the Dubai Land Department shows. In the first half of last year, British buyers poured no less than $1.51 billion (Dh5.54 billion) into the Dubai property market, a 44 per cent jump over the same period in 2013. Over the past few months, Dubai has seen property buyers from the UK keeping developers and real estate agents busy as it became obvious that the property market is balancing out from the wild upswings in 2013 and seems to be cooling to a more sustainable level.
The sentiment towards the property market has also changed. Buyers have adopted a long-term approach over short-term speculation. Those times are probably over when, for example, Emaar’s high-profile roadshows in London would see droves of investors queued on the street to enter large hotel ballrooms just to be able to pay thousands of pounds as down payment for a new unit in Dubai.
Emaar has also been able to be selective with its buyers: at the 2013 launch of The Address Residence Sky View II in Downtown Dubai, the first options to buy were given to residents of UK, Qatar and Saudi Arabia.
British interest in the Dubai property market is unchanged. This can be seen at the inaugural Dubai Property Show, which runs from Friday to Sunday in London. Organised by Dubai-based Sumansa Exhibitions, the inaugural edition of the show will be spread over 3,800 sq m with 120 exhibiting stands and around 2,000 serious real estate buyers expected.
“[It’s a] high-potential customer base,” says Sunil Jaiswal, CEO of Sumansa Exhibitions. “It has a large group of financiers, investors and end users that is yet untapped on a large scale by Dubai’s developers. That global-thinking international customer base is in London.”
The show aims to give exhibitors access to more than 8 million Londoners and millions living in other European countries, says Jaiswal. Exhibitors will also be able to find a completely new audience of buyers, investors and finance houses to sell projects to. “Dubai is one of the best markets in the world and surely the number one in Middle East,” says Jaiswal. “British property investors are savvy — they understand the potential here and also value the no-tax policy on rental and capital gains, plus no restriction on repatriation of funds, which just makes the Dubai real estate market not only fruitful but easy and transparent.”
The CEO also points out that in terms of quality of life, Dubai ranks high among other nations the British would consider emigrating to, such as Australia and Canada.
However, residential regulations in Dubai differ from Commonwealth states. Every non-GCC expat living in the UAE has to be on a working or business visa. Real estate buyers could be offered an investor visa by developers if they buy a high-end property, but these aren’t long-term and are issued at the discretion of the immigration or residency department.
One could circumvent the residency visa problem by setting up a small free zone company and receiving a renewable free zone visa. However, everyone beyond the age of 65 is considered retired and might not have his or her visa renewed, which should be taken into account when buying property in the UAE for long-term use.
Arab buyers in London
On the flip side, London’s real estate market is continuing to attract Arab buyers in huge numbers.
Apart from large-scale Arab investments in office towers such as The Shard and prime property such as Canary Wharf, No 1 Hyde Park or Chelsea Barracks, Arab investors traditionally have fancied properties in Knightsbridge, Chelsea, Mayfair and Belgravia. These central areas are continuing to attract wealthy people from the Gulf states, which has also been fuelled by the political turmoil in some Arab states in the past.
In Mayfair alone, 10 per cent of all homes were bought by Arabs in 2013, according to London property firm Wetherell Estates. Moreover, the Abu Dhabi royal family is now the largest landowner in Mayfair after the Duke of Westminster.
Overall, Arab buyers have spent $6.7 billion on prime property since 2006 and are the majority homeowners in nine of central London’s largest development areas.
One such project is the $2.4-billion Royal Wharf development in East London, a series of luxury mixed-use developments geared at Abu Dhabi investors. Royal Wharf will create a new town centre when completed in 2020, with more than 3,300 riverside homes for approximately 10,000 residents.
The project is the largest development in London to come forward since the launch of Battersea Power Station and will include new parks, a high street with nearly 5,000 sq m of shopping space, bars and restaurants, as well as community infrastructure, including a school, says property agency Chesterton Humberts, which is marketing the project in the UAE.
Chesterton Humberts held a roadshow in November in Abu Dhabi that had “tremendous response”, according to Samuel Warren, Director of International Residential Developments. “The UAE is one of our strongest global markets,” says Warren. “Investors here understand the strong capital returns from the London real estate marketplace. London, unlike any other property market, is a key hub for international property investors.
“It is a versatile global capital as it offers the best prospects for investors in terms of future growth. The Royal Wharf project launch is indeed a golden prospect for investors in and around Abu Dhabi to make the best investment deals in this London property.”
Apart from that, Abu Dhabi is also investing $300 million in the former US Naval Headquarters in Grosvenor Square, which will be redeveloped into luxury apartments and penthouses.
The Deputy Prime Minister of Qatar owns a $270-million luxury mansion on Curzon Street, while state investor Qatari Diar bought the former US Embassy building on Grosvenor Square for $760 million to convert it into a luxury hotel. Another development zone favoured by Arab investors is South Bank, an area in central London adjacent to the southern bank of the River Thames and opposite the City of Westminster. It is where Qatar-funded The Shard tower was opened in 2012 and is seen as a new hotspot for investors and residents with a number of high-profile developments at still affordable prices.
Since activity kicked off in South Bank, investment performance has been comparable to central London, although prices haven’t reached the latter’s level yet.
With massive interest especially from younger Arabs, many of them educated at London universities, South Bank is turning into a hip area for the modern crowd, for people who prefer high-end tower apartments with amazing views over luxury mansions in quiet Mayfair, Belgravia, Notting Hill or Kensington.
There is also high demand for offices as a somewhat cheaper alternative in South Bank due to its proximity to central London. For example, Qatar’s Al Jazeera has moved its London headquarters to the area, naturally into The Shard tower. There is strong interest from technology, media and telecommunications firms in particular. And it seems that wealthy young Arabs are not just wanting a luxury London leisure home, but now come to London far more frequently for business and socialising.
“What have transformed South Bank’s fortunes are the high-quality office buildings developed in recent years and new transport infrastructure built, which has opened up the market to tenants,” says Stephen Clifton, Head of Central London Offices at property firm Knight Frank, describing the stretch from London Bridge to Battersea Power Station along the River Thames as “London’s third city” after London and Westminster. “So I would say the foundations are being laid for another burst of growth.”
There also seems to be a shift in prices in London’s real estate zones popular with Arabs.
While, interestingly, some of the largest declines of up to 7 per cent were seen in wealthy neighbourhoods such as Chelsea and Kensington, South Bank has been stable in an otherwise cooling London property market after the average price per square metre in the area rose from £1,700 (about Dh9,582) to £2,000, whereby £2,000 to £2,500 is considered the threshold bracket for above-average property in London.
But this is still a far cry from the £11,000-per-squaremetre asking price in Kensington or Chelsea, where the top luxury crowd stays.
Source: Arno Maierbrugger, Special to Property Weekly