Investors are turning their heads to the United Arab Emirates property market as investments in the area offer stable returns after a steady recovery from the global economic effects to the sector three years ago.
Property markets globally suffered when the recession hit in 2008, however Dubai has managed to recover stronger than most due to the popularity amongst investors of the luxurious properties and market fundamentals the Emirates has to offer.
The National Bank of Abu Dhabi and Kuwait-based Gulf Investment Corp has launched a UAE real estate investment trust this week that is expected to attract many property investors to buy Dubai property.
Officials of the fund have stated that stable, healthy returns can be made if the investors target high quality commercial property. One expert commented: “Crashes create opportunities.”
The fund will concentrate on commercial and industrial areas and will be publically floated in approximately 18 months. The new fund has aims to raise one billion UAE Dirhams ($272 million) and will have a Dubai-based unit so it can be operated under the legal structure of the DIFC. If the new fund is successful, banks will then look at other funds to target sectors such as hospitality.
The news comes after the announcement this week that the Dubai property market has a new law protecting investors when they buy a property off plan. The Dubai Land Department has revealed the new law will prevent developers from selling any units until the development is over 20 percent complete.
The law regulates the starting process of building a new development by checking the reliability of the developer and eligibility to carry out the project. The law will also consider the legal status and monitor the construction process.