UAE’s rich likely to stick with home realty

High networth investors in the UAE are less likely than their Gulf counterparts to commit funds on property deals elsewhere in the Middle East, according to findings released by Cluttons, the consultancy. Instead, they are far more likely to stick with investing locally, with a majority of those polled saying these would be in the $1 million to $1.5 million (Dh3.67 million to Dh5.5 million) range. In the second part of Cluttons “Middle East Private Capital Survey”, 63 per cent of those polled plan to invest in their preferred real estate locations during the year, with 27 per cent identifying Dubai as among their Top Three destinations within the Gulf, while 21 per cent chose Abu Dhabi and 8 per cent opted for Sharjah. "If these deals do pan out, it would be good tidings for the UAE property market after experiencing a sharp correction in values last year. But it does not necessarily mean developers should be rushing out with high-end off-plan launches to tap these investments," according to gulfnews. “Seventy-five per cent of UAE based high networth investors were talking about funds of $1 million to $1.5 million — that’s not going to get them a villa in Emirates Hills or a Palm,” said Faisal Durrani, Head of Research at Cluttons’ regional office. “Instead, a group of such investors would typically pool their funds through special purpose vehicles on smaller residential buildings in the older parts of the city. This is because the yields on these are more attractive for these sophisticated investors. “These would typically be in the Dh15 million to Dh25 million range. Properties on the periphery of the city could also prove attractive because of their higher yields.”