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The first half of the year saw Indians ranking highest among foreign real estate investors in Dubai, a position they have retained over the past few years. Data released by the Dubai Land Department (DLD) in August revealed a total of 3,017 transactions worth more than $2 billion (Dh7.34 billion) from Indian investors, out of a total $14.4 billion real estate deals.
Against this backdrop, the Dubai Property Show heads to Mumbai, India, with more than 35 reputed UAE developers showcasing over 1,000 properties. Organised by Sumansa Exhibitions in collaboration with the DLD, the event will be held on Friday until Sunday at the Bombay Exhibition Centre. Developers taking part in the event include Emaar Properties, Nakheel, Dubai Properties, Falcon City of Wonders, Deyaar Development, Meydan Sobha, Damac Properties, Jumeirah Golf Estates, Dubai Sports City, Kleindienst Group, Al Hamra Real Estate Development and Select Group. Real estate projects to be presented include budget homes, luxury apartments, beach properties, villas, furnished apartments and commercial properties.
Developers point to the lure of high rental yields combined with the high standard of living, proximity to India, lower interest rates and tax-free returns as some of the key driving factors for Indian investors.
“Clients in Mumbai are especially receptive as the prices in Dubai compare favourably in comparison with the high Mumbai realty prices,” says Dev Maitra, CEO of Indigo Properties, one of the exhibitors at the show. “Indian buyers seem to have heard of the Palm Jumeirah and Downtown Dubai a lot. Of late we have had a lot of success with our town house project Indigo Ville in Jumeirah Village due to the price point. We would be showcasing Indigo Zen in Dubai Golf City, offering 346 villas and town houses on a special payment plan.”
The three-day free event, which expects almost 5,000 buyers, will also host seminars and other presentations by financial consultants, brokers and investment companies. “This show will provide Indians with unique exposure to Dubai properties ranging from completed to off-plan projects,” says Sunil Jaiswal, President of Sumansa Exhibitions. “The show will also host a number of seminars that will help Indians make informed decisions in line with their budget. Moreover, there will be promotional deals and low-interest loans on offer.”
Indians traditionally invest in gold in Dubai, however, the emirate’s attractive real estate returns have convinced many to diversify their investment portfolio, says Talal Moafaq Al Gaddah, CEO of MAG Property Development. “India is traditionally entrepreneurial with an estimated 48 million small businesses alone,” says Gaddah.
“India manages to avoid market woes, and the savvy Indian investor understands any investment should yield a decent rate of return with calculated risk, which is why India remains in the top three nations investing in Dubai today. Although gold has been a long-time regional favourite for achieving decent returns, markets are erratic at best.
“Any investment in Dubai property consistently offers a realistically potential conservative rental yield upwards of between 8 per cent and 10 per cent in a safe and stable environment. When coupled with a unique payment plan, which mitigates total investment outlay, the math makes perfect sense.”
According to new figures from the DLD, apartments are the favourite asset class among Indian buyers, accounting for 60 per cent of their investments. Business Bay, Downtown Dubai, Dubai Marina and Al Barsha are among the favoured locations. “The characteristic Indian mind set of solidify- ing assets in multiple arenas complements the dynamics of Dubai’s real estate market that offers a number of options to buyers to accommodate their budget and preferences,” says Jaiswal. “Recent trends of purchasing properties in locations such as Downtown Dubai, Dubai Marina, Jumeirah Lakes Towers and the Palm Jumeirah also suggest that buyers are looking at profitable dividends in the shape of rents and resale value.”
Several factors, including government policies and price, have helped make Dubai attractive for Indian investors in real estate. The average ticket size for prime locations in Dubai, including Dubai Marina, Business Bay and Downtown Dubai, is around Dh2 million-Dh4 million, similar or even lower than prices in prime locations in Mumbai such as Bandra, South Mumbai and Juhu.
PNC Menon, Founder and Chairman of Sobha Group, who has developments in both India and Dubai, feels the emotional connect and ease of doing business in Dubai are factors driving Indian investment in the emirate. “Dubai offers a cosmopolitan lifestyle, great airline connections and the best of the East and West,” says Menon.
“Indians looking to invest outside of India find Dubai to be a very easy place to do business and transact in real estate. They find great comfort in the improved regulatory environment for real estate that provides more transparency and consumer protection.
“The fundamentals of Dubai are very strong with tourism, the airline network and investment in local infrastructure. The lifestyle offerings in Dubai make it a magnet for international tourists and residents. From restaurants and shopping to nightlife and entertainment, Dubai is a home away from home for Indians.”
Analysts also point out that the recent move by the Reserve Bank of India (RBI) to allow investors to send funds of up to $250,000 to buy property overseas has also boosted sentiment.
With a healthy level of new supply anticipated to enter the Dubai market over the next few years, prices are not expected to skyrocket anytime soon. The Dubai government’s move to check speculative investors is also expected to boost the confidence of foreign investors who have a long-term view on the region.
“Off-plan projects are typically cheaper and may be available on better financial terms [with lower down payments], while ready-to-move-in projects have the advantage of being available immediately, avoiding potential uncertainties,” says Mustafa Pooya, Chief Commercial Officer of Select Group.
“Investors of Indian origin are part of almost every freehold development, if not every project, in Dubai. With its unmatched infrastructure, secure environment and tax-free business opportunities, Dubai is still undervalued when compared to a city like Mumbai. We feel that all property types and price ranges have an appeal for a certain buyer segment in India.”
Select Group will be showcasing the 3.8-millionsq-ft Residences at Marina Gate, which was launched last year and will have more than 1,400 luxury apartments. The company says it will also have special offerings at the property show, including previously unreleased waterfront units and full-floor penthouses.
Meanwhile, despite the rise of alternative regional markets for international buyers, Dubai will remain the focus for most activity in the region, according to Greg Lewis, Senior Negotiator at Knight Frank.
“Buyers are looking to lock in the potential for economic growth, led by the headline forecast for a 20 per cent rise in the population of the UAE by 2030,” says Lewis.
“Superlatives for the Dubai economy abound. Its airport already serves 70 million travellers a year with capacity set to rise to 200 million, while the port at Jebel Ali is expected to become the world’s largest in the next 15 years, reflecting Dubai’s emergence as China’s logistical hub for the Middle East and Africa.”
Source: Manika Dhama, Special to Property Weekly