Wednesday, June 19, 2019 11:05 AM

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Institutional investors inject Dh100bn in Dubai’s real estate sector in 2017

Institutional investors carried out 15,600 transactions in Dubai’s real estate market in 2017, with a combined value of just over Dh100 billion, according to a latest report issued by Dubai Land Department. 


The report also revealed a steady increase in the contribution of construction and real estate services to foreign direct investment, which reflected positively on the total value of real estate investments in 2017 that amounted to Dh107 billion.


“This sector of the market has consistently grown in value each year since 2013 with transactions by institutional investors totalling around Dh85 billion. Most investments by institutional investors involved some form of debt financing, and the vast majority of transactions were completed rather than remain as off-plan projects. Additionally, unlike other global cities, most purchases were in residential areas rather than commercial ones,” said Thierry Delvaux, CEO of Jones Lang LaSalle (JLL) MENA.


“Though Dubai’s market is still dominated by individuals and private companies with less institutional investment than in more mature markets overseas, as it develops and more investment-grade real estate becomes available at reasonable price levels, we believe the level of interest from institutional investors in the Dubai market will increase over the next five years.”


These reports contribute to enhancing Dubai's real estate market, positioning it as the world's leading real estate market. According to the JLL Global Real Estate Transparency Index 2018, Dubai was among the top three global cities regarding real estate market transparency.


Sultan Butti bin Mejren, Director-General of Dubai Land Department, said: “The current real estate sector enjoys several positive indicators that predict growth across many of its segments, supported by the annual report of the real estate sector and the 2018 Deraya report, which represents integrated strategic cooperation between the public and private sectors. The reports are also a testament to Dubai’s status as one of the world’s top attractive investment destinations that ensures investors future high yields.”


Jay Grant, Chairman and Cavendish Maxwell, said: “A young city competing on a global field for investor recognition, the Dubai real estate market has faced challenges over the years as it developed its level of understanding, initiative, and maturity.”


In addition, the chapter delves into the performance of Dubai’s hotel sector from 2012 to 2017, offering comparisons across many factors. The performance analysis shows that the number of hotel rooms grew by 44 percent during that period, and highlights the number of new and renewed leased and sold offices, shops, retail stores, and residential units. It also details the number and areas of residential units under construction from 2014 to 2017. The report classifies investments by gender, age, and type of asset.