Wealthy property investors name Dubai as their preferred Middle East location
|Wednesday, 26 December 2012|
Dubai is the most attractive destination to private investors within the Middle East region, with Riyadh and Doha emerging as strong secondary and tertiary target locations, respectively, a new report shows.
Despite Eurozone uncertainty dragging down the performance of the broader global economy, the Middle East is the only global region to have recorded positive growth in total HNWI wealth from 2010 to date, says the report from real estate specialists Cluttons.
This corresponds with International Monetary Fund predictions of an average GDP growth of 3.4% across the Gulf Cooperation Council next year and expectations for Gulf States to outperform major western economies.
The report, which examines investor sentiment in the region, says it is therefore unsurprising that the number of HNWI looking to invest regionally is 60% higher than in 2011 and that 80% of those surveyed are very likely to make an investment in the region during 2013.
Dubai emerged as the top investment target for both investors from the United Arab Emirates and those from all other cities surveyed, with 80% of HNWI very likely to make an investment in Dubai during 2013.
Within Dubai itself, HNWI interests are split across several sectors with 40% looking at residential, the same at hotel and leisure property investment and 20% retail and malls. Typical budgets for Abu Dhabis HNWI seeking residential assets in Dubai range from AED50 million to AED80 million, with multi storey G+8 to G+12 tenanted residential buildings which contain some mixed use and good covenants, topping wish lists.
Aside from Dubai, Saudi ArabiaҒs residential market and Dohas office, hotel and leisure sectors remain high on the lists of Abu DhabiҒs HNWI.
For investors based in the Bahraini capital, Riyadhs residential market and DohaҒs residential, office and hotel and leisure sectors are also of high importance. For HNWI from Muscat industrial assets in Riyadh and Dohas hotel and leisure sector come second to Dubai.
After Dubai, the Kingdom of Saudi Arabia emerged as the next most desirable investment destination for the regionҒs HNWI, with 20% in Abu Dhabi and 15% in Manama stating that residential property in Riyadh was high up on their target lists, while the Saudi capitals industrial assets topped MuscatҒs HNWI interests at 20%. Some 60% of Riyadh based investors identified Dubais residential, office and hotel and leisure sectors as sought after asset classes.
The report points out that the abolition of all restrictions on foreign property ownership in May 2012 has helped to propel Istanbul on to the radars of the regionҒs HNWI, with 60% of those surveyed naming the Turkish capital as an emerging destination of high interest.
Doha, which hosts FIFAs World Cup 2022, is also experiencing an upturn in investor interest as the country plans to undertake up to US$150 billion of infrastructure development over the next 10 years in the run up to the event. Specifically, the Qatari capitalҒs residential and hotel and leisure sectors are of particular interest for the regions HNWI according to the survey.
ґDubais improved attractiveness, as a result of the regional geopolitical tensions, coupled with the emirateҒs economic recovery has in effect created a perfect storm, which Dubai is benefitting from tremendously, said Ian Gladwin, chief executive officer at Cluttons.
ґIt is clear that real estate assets continue to take precedence when it comes to regional investment activity. That said, given the ever changing economic climate, coupled with the long lasting effects of the recession, a clear strategy focussed on building diverse asset portfolios within the Middle East is beginning to emerge, with the regions stock markets, alternative investment funds and gold helping to balance out investorsҒ portfolios, he explained.
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