Tuesday, July 17, 2018 8:10 AM

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Chinese firm to bring Dh2bn to Dubai realty

A Chinese real estate marketing company, UC Forward said, it will attract Dh2 billion investment in to Dubai’s real estate market – where Chinese investment has been quite low.

Dubai Land Department (DLD) has appointed UC Forward Marketing as its Real Estate Promotion Trustee for the Chinese market. Under the agreement, UC Forward will promote investment in Dubai’s real estate market amongst a large pool of Chinese investors and wealthy property buyers who might be looking at a second or a third home for investment or holidaying.

“We expect to attract more than Dh2 billion investment in the first year of this partnership with Dubai Land Department,” Richard Huang, chairman of China-based UC Forward, told Gulf Property.

“China has a large pool of high net worth individuals  and the potential for Chinese overseas investment is huge. Dubai property prices are one-seventh of those in Hong Kong and one-third of properties in Singapore. Besides, high rental yield of 7-8 per cent as compared to 1-2 per cent in other markets make investment in Dubai’s properties more lucrative to Chinese property buyers.”

The company will also be able to register properties for Chinese investors through its extensive network of offices in China. It will maintain a registration trustee office in Dubai as well, to cater to the 300,000 strong Chinese community in the UAE.

UC Forward is a real estate sales and marketing consultancy and an exclusive partner of Fang.com, China’s largest online property portal with a 70 per cent market share. With more than 34 million active members and 9 million unique users each month, Fang.com is the world’s most popular real estate website.

The number of high net worth individuals (HNWIs) in China has risen nearly 9 times in the last decade, a recently released private survey showed. 

The number of Chinese with at least 10 million yuan ($1.47 million) of investable assets hit 1.6 million in 2016, up from 180,000 in 2006, according to the 2017 China Private Wealth Report by Bain Consulting and China Merchants Bank. The overall value of the private wealth market increased to 165 trillion yuan ($24 trillion) in 2016, growing at 21 per cent annually in 2014-2016.

The percentage of HNWIs with overseas investments increased to 56 percent in 2017, up from 19 percent in 2011, but the overall percentage of assets invested overseas has stabilized since 2013.

Rapid economic growth in recent decades has led to a massive rise in private wealth not just in China, but across the Asia-Pacific region. A study released by the consultancy Capgemini last year showed that the number of millionaires in the region was growing steadily.

There were 5.1 million people in the Asia-Pacific region who own more than a million US dollars each, Capgemini's report stated. That marked a 9.4 per cent rise in the number of millionaires in Asia, making it the continent with the most super-rich people globally, knocking North America from the top position.

But the latest report by Bain Consulting and China Merchants Bank expects the growth rate of China's private wealth market to decline to 14 per cent in 2017, to a total size of 188 trillion yuan.

The pace at which Chinese millionaires are generated is also about to slow down, with the report projecting a growth rate of 18 percent this year, down from the 23 percent surge the country saw between 2014 and 2016.

Huang said, his company will rope in more than 1,000 property brokers and online web portals to promote Dubai’s real estate in China.

“The biggest hurdle for Chinese investment outside China is the language barrier and we want to overcome this through our dedicated Chinese staffs,” he says.

According to DLD’s database, the value of Chinese investments in Dubai’s real estate market has exceeded Dh12 billion to date. Since 1996, 4,475 Chinese investors have made 8,259 real estate transactions in Dubai, which places them in 12th place among the 217 nationalities investing in Dubai’s real estate market.

Indian nationals topped the list of foreign investors in Dubai’s real estate market investing Dh20.4 billion (US$5.55 billion) through 10,628 transactions in 18 months, starting from January 2016 till June 2017, according to DLD report.

UK citizens took poll position among the European nationalities with 4,188 transactions worth Dh9 billion while Pakistani investors injected Dh7 billion through 5,398 real estate transactions.

UAE nationals topped the overall list of investors registering Dh37.4 billion investment through 12,000 transactions. Saudi Arabians led the Gulf nations with 5,366 transactions worth Dh12.5 billion.

Investors from Egypt, China, Jordan, Lebanon and America placing in sixth to tenth places respectively through 2,439 transactions worth over Dh4 billion. Egyptians came in sixth place, followed by Jordanians who made 2,235 transactions worth Dh4.2 billion.

Chinese investors ranked in eighth place after concluding 2,177 transactions worth Dh3.14 billion, while Lebanese nationals came in  ninth place with 1,313 transactions worth Dh2.6 billion and Americans ranked tenth with 1,119 transactions worth close to Dh2.9 billion. Combined, all of the other nationalities registered in the DLD’s database made a total of 23,318 transactions amounting to a total value of Dh48.66 billion.

Which means, the bulk of the investment, or Dh113.6 billion came from foreign countries. This translates to 75.23 per cent foreign investment in Dubai’s real estate, compared to 24.77 per cent local investment.

Although India, Saudi Arabia, United Kingdom, Pakistan, Egypt and Jordan are bigger sources of foreign investment in to Dubai’s land and property sector, most Dubai’s developers and real estate brokers have been actively pursuing the Chinese market for selling apartments and villas, due to a higher concentration of wealth in the People’s Republic of China.

Recently Deyaar, a Dubai-based property developer, has appointed UC Forward to market its properties in the Chinese market.

China remains the UAE's top trading partner, with annual non-oil trade at about $46 billion. The UAE's Ministry of Economy recently said that the country's investment in China totalled $2.1 billion in 2016.

Estimates showed that the Chinese population in Dubai has seen rapid growth by 53 percent over the last five years, and Chinese expats run at least 4,000 companies in the UAE.

Dubai Land Department and UC Forward confirmed their joint objective of securing Dh1 billion worth of Chinese investment for Dubai’s real estate market. As part of the agreement, UC Forward has established its own counter at DLD’s office in Al Fahidi Hall to provide free Chinese and English language consultancy services to Chinese investors.

Sultan Butti bin Mejren, Director General of Dubai Land Department, commented: "We are delighted to have established a mutually beneficial partnership with UC Forward, as it will allow us to attract further investments into our real estate market. UC Forward will play an important advisory role, including raising awareness of the advantages of investing in Dubai’s real estate market, and helping to protect investors and their rights by clearly communicating our laws and regulations in both Chinese and English.

This is the first time Dubai has appointed a Chinese company to play this role, which reflects the UAE’s strong relationship with China. The partnership will see both parties working together to enhance DLD’s image through Chinese channels, attract direct foreign investment from China, and foster positive cooperation between DLD and Chinese real estate companies, brands and financial institutions.

A report from accounting firm PriceWaterhouseCooper (PwC) showed that a billionaire was minted every three days in Asia, with entrepreneurs in China accounting for 80 per cent of new billionaires in the region. China’s billionaires in recent years have made their mark globally, investing in or buying high-profile assets overseas. But an anti-corruption campaign over the past four years has netted some of China’s biggest tycoons, adding sensitivity to the country’s private wealth market.

UC Forward will work closely with DLD to protect the rights of Chinese investors in Dubai’s real estate market through a variety of initiatives. The company will raise awareness of DLD’s rules and regulations among Chinese investors; offer consultation services for real estate investments, transactions and rental disputes; provide Dubai Real Estate Institute (DREI) certified real estate brokerage courses and examinations in Chinese; and assist DREI in organising free open house events for the public.

Majida Ali Rashid, Assistant Director General and Head of the Real Estate Investment Management and Promotion Center at DLD, commented: “DLD offers its full attention to investors from across the globe, and the Chinese market is currently considered one of the most promising for attracting real estate investments. This is demonstrated by the high number of Chinese nationals choosing to visit and live in the UAE.

“In addition, the Dubai Property Show held in Shanghai last March achieved unprecedented success and attracted a large number of stakeholders. Our new partnership with UC Forward will certainly help us to raise awareness of the investment opportunities that our real estate market has to offer Chinese investors.”

Dubai’s developers have been trying to attract Chinese investors through a number of events and exhibitions – such as Dubai Property Show, Hong Kong.

Sajid Ali, Director, Sumansa Exhibitions commented: “Chinese have become an integral part of Dubai real-estate, as evident by the whopping 10.6 billion Dirhams (CNY 19.8 billion) that they had invested in the Emirate’s property until last year.