Dubai top choice for HNWIs in GCC in 2013

HNWIs keen to invest in emirate’s hospitality and residential property sectors: Cluttons

Dubai’s residential property and hospitality sectors are set to witness increase in investments with high net worth individuals (HNWIs) from Gulf Cooperation Council (GCC) countries voting the emirate as their top investment destination for 2013, according to a new survey.

“Dubai emerged as the top investment target for both investors from the UAE and those from all other cities surveyed, with 80 per cent of HNWI very likely to make an investment in Dubai during 2013,” Cluttons, a global real estate consultancy, said in its first Middle East Private Capital survey.

Within Dubai, HNWI interests were equally split between residential and hotel and leisure sector (40 per cent each), while 20 per cent favored investment in retail and malls.

Ian Gladwin, Chief Executive Officer, Cluttons, said: “Dubai’s improved attractiveness, as a result of the regional geopolitical tensions, coupled with the emirate’s economic recovery has in effect created a ‘perfect storm’, which Dubai is benefitting from tremendously.”

He added: “It 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 ‘great recession’, a clear strategy focused on building diverse asset portfolios within the Middle East is beginning to emerge, with the region’s stock markets, alternative investment funds and gold helping to balance out investors’ portfolios.”

Last week, Jones Lang LaSalle, in its seventh Mena Investor Sentiment survey, said investors from the Middle East and North Africa (Mena) region are keen on buying real estate in Dubai due to its international appeal, transparency and legal structure.

It further stated that Dubai was the top investment destination across the Mena region for real estate and investors’ were expecting the emirate to remain the strongest performing real estate market in the region for the next 12 months.

Dubai has already announced three multi-billion-dirham projects: Mohammed Bin Rashid City, comprising the largest mall in the world, a park bigger than London's Hyde Park and over 100 hotel facilities; Dh10-billion leisure and entertainment destination with theme parks in Jebel Ali and Dh2.5-billion for expansion of JW Marriott Marquis, the world’s tallest hotel.

MasterCard, a global credit card company, said in June that Dubai ranks among the top 10 tourist destinations worldwide and the emirate is expected to attract 8.8 million international visitors in 2012 with spending estimated at around $8.8 billion.

Cluttons Middle East Private Capital survey examined intra-regional investor sentiment, attitude and behaviour of HNWIs based in Abu Dhabi, Dubai (the UAE), Manama (Bahrain), Muscat (Oman) and Riyadh (Saudi Arabia).

The survey put Dubai as the most attractive destination to private investors within the GCC region, with Riyadh and Doha emerging as strong secondary and tertiary target locations.

With the Middle East being the global region to have recorded positive growth in total HNWI wealth from 2010 to date, found the number of HNWIs looking to invest regionally was 60 per cent higher than in 2011, and that 80 per cent of those surveyed are very likely to make an investment in the region during 2013.

After Dubai, Saudi Arabia emerged as the next most desirable investment destination for the regional HNWIs, with those in Abu Dhabi (20 per cent) and Manama (15 per cent) stating residential property in Riyadh was high up on their target list, while the Saudi capital’s industrial assets topped Muscat’s HNWI interests (20 per cent).

Sixty per cent of Riyadh-based investors identified Dubai’s residential, office and hotel and leisure sectors as sought after asset classes.

Istanbul topped the list of most emerging destination in the region with for HNWIs following abolition of all restrictions on foreign property ownership in May 2012.

Doha, host to FIFA’s World Cup 2022, experienced an upturn in investor interest with regional investors particularly showing interested in residential, hotel and leisure sector.

Qatar is planning to spend up to $150 billion in infrastructure development over the next 10 years in the run up to the event.

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