Dubai property investors to switch focus to yields

Dubai property investors to switch focus to yields

Dubai investors are now keen to add regular yields to sustained levels of capital growth, experts have suggested.

Summary:

  • Buy-to-let, shopping centres and office buildings are set to be popular within the Dubai property market
  • Investors are searching for yields of around 9% from their assets as capital growth becomes more stable
  • The level of debt in Dubai is well regulated and much lower than the world’s other prime property markets

Property investors in Dubai are now searching for assets capable of delivering higher yields, such as buy-to-let residential property, office buildings and shopping centres, following periods of market-leading capital growth.

The rate of growth of property prices is now set for a more sustained level, with analysts predicting a bright long-term future for Dubai property investments.

Alan Robertson, Chief Executive of the Property Advisory Jones Lang LaSalle for the Mena region, was speaking at Meed’s Destination Dubai conference and explained: “The change we have seen is that investors now want a little bit more return for their money than they did six months ago or 12 months ago.”

Recent Land Department figures show the value of Dubai property deals remained high at 218 billion AED (£39.3 billion) and there is a feeling that investors want around a 9% yield from their assets.

Sajid Siddique, Vice President at Mashreq’s investment banking division, said there will be a lot of new residential property coming to the market, but this is expected to be absorbed by the emirate’s rapid population growth, while the upcoming World Expo 2020 event is a further reason for economic positivity.

Explaining Dubai’s debt of $142 billion (£25.6 billion), he said that it was hard to avoid when growing the economy, but Dubai has strong regulation in place, with many banks restricted in what they can lend, even to government-related entities.

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