Dubai, Sharjah, and Abu Dhabi have become the preferred destinations for wealthy real estate investors in the Gulf region looking for a property in the UAE real estate market. They polled high net worth individuals (HNWIs) across the Gulf region to arrive at these conclusions. Dubai came first with more than 27% of investors saying they preferred Dubai as their favorite destination to invest in real estate. This article provides a comprehensive overview of the UAE cities that remain the preferred option for wealthy Gulf real estate investors.
63% of HNWIs To Invest In UAE Real Estate In 2016
The research revealed that 63% of HNWIs were planning to invest in real estate in their preferred destinations during the year of 2016. Dubai ranked first on the list of preferred destinations of HNWIs with 27% while Abu Dhabi came second with 21% of HNWIs preferring to invest in Abu Dhabi in 2016. Sharjah came out third with 8% of the high net worth individuals in the Gulf region planning to invest in that city. Four other Gulf cities, including Doha, Kuwait City, Riyadh and Muscat, were preferred by 3-4% of high net worth individuals. Outside the Gulf, Istanbul is the favorite destination for real estate investments. More than 8% of the HNWIs have said that they will consider Istanbul due to its strategic location. Meanwhile, the Dubai Land Department reported that individuals from the Gulf were the city’s largest real estate investors in Dubai property last year. They have spent more than AED44 billion, approximately $12 billion, in UAE real estate in Dubai in 2015. The majority of these investments came from Emiratis, who had spent over AED26 billion in real estate investments last year. Saudis had spent AED10 billion during the same year.
Faisal Durrani, who is the research head at Cluttons, said that the variety of UAE real estate opportunities available in Dubai was the main reason for investors to choose the city as their favorite destination in the Middle East. Some of the investment options available in Dubai range from high yielding, low-end residential units peripheral schemes like Discover Gardens and International City to much more sophisticated investment opportunities in the office market. In fact, the yields in the office market can range from 6.5% to 9% most of the time.
Worker accommodation is also emerging as a viable real estate option in Dubai where the yields can be high 10% to 20% most of the time. While the majority of high net worth individuals didn’t mention the exact area they would invest in Dubai, most individuals have mentioned the Spings and Bur Dubai for residential properties while Deira and Downton Dubai are preferred for commercial real estate. In fact, the rise in Dubai’s property market for the last 14 years has captured the attention of the wealthy individuals of the region. This is why the HNWIs plan to invest in real estate in the UAE.