When Dubai developer Emaar Properties wanted to introduce the world to its luxurious new 77-story residential tower, Il Primo, last month, it did so by opening a special marketing suite on the second floor of Harrods department store in London.
Makes sense. Britain is the second-largest international market for purchasing residential property in Dubai, according to Dana Salbak, research manager for the Middle East and North Africa for real estate consultancy Knight Frank. Only India tops the U.K. on the city’s list of international investors.
"The UAE has historic business ties with both India and Britain, which explains why a lot of the capital inflows come from those two nations," Ms. Salbak told Mansion Global. "`The commercial ties between the UAE and the U.K. go back long before property was established as a major industry in the UAE. Many families who have lived in the UAE in the 1960s and ‘70s continue to do so and have raised their families here, who have now in turn come back to choose Dubai as a home for them or a second home, and have invested accordingly."
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Leading the pack overall, she said, are investors from the United Arab Emirates themselves, followed by the Saudis, for whom the UAE is a desirable location for second homes. But behind them are investors from a parade of countries—149 nationalities bought property in Dubai during the first six months of 2016, Ms. Salbak said.
Simon Barry, head of new developments at Harrods Estates, said through his public relations firm Lawrie Cornish, that the market is about 60% to 70% international buyers—and the buyer profile has grown more diverse every year.
Traditionally, both Indian and British buyers have been the most active, but in recent months there have had buyers from France, Canada, Holland, Belgium and Ireland, according to Harrods Estates.
Ms. Salbak said that after the Indians and the British, the Pakistanis have historically rounded out the list of leading foreign investors and continue to hold the No. 3 spot. The Russians, however, have dropped from No. 4 to No. 6, she said, as the ruble has been devalued against the dollar.
The Brexit vote has had a somewhat negative effect on British investment in Dubai’s residential market, Ms. Salbak noted. She said the Dubai Land Department reported that Britons invested the equivalent of $1 billion (U.S.) in Dubai property in the first half of this year, down from $1.3 billion in the same period in 2015. However, she said, "it’s still quite substantial, and we don’t foresee this dropping drastically."
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According to Harrods Estates, Dubai is a growing market, with increasing demand and sales, and continuing interest among buyers from a diverse range of nationalities, those who are looking for a home as well as those who are seeking an investment.
Though Dubai’s residential market softened during the second quarter of 2016 for the sixth consecutive quarter, the result of declining oil prices and weaker international currencies compared with the U.S. dollar, the city still commands interest among buyers from all over the world.
Dubai’s position on the map makes it an ideal global hub, fueled by their investment in hospitality, financial services, airlines and global trade, said Harrods Estates.
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