UAE investors' real estate confidence grows

Friends Provident survey says property increasingly seen as preferred asset class
A speed boat exits the new Dubai Marina with its high rise apartment towers in Dubai on May 28, 2011. (AFP/Getty Images)
By Andy Sambidge
Fri 30 Nov 2012 11:00 AM

UAE investors are increasingly turning to real estate as a preferred asset class, a new report by Friends Provident International said on Monday.

Its latest Investor Attitudes Report revealed that UAE investors now consider property second only to gold.

Almost half (49 percent) of respondents said they expect the property market to perform strongly over the next five years.

A further 11 percent said they expected "very strong" growth over the same period.

Only 10 percent of respondents said they expect to see some weakness in the property market in the next five years.

The report, compiled from a survey of wealthy, UAE-based expatriate respondents, showed that investors believe the investment market has improved over the last six months, and that there is strong sentiment that markets will continue to improve over the next six months.

The Friends Investor Attitudes Index for the UAE now stands at 17 points - an increase of two points on the previous wave of research in June.

Investors' confidence in the UAE property market comes as Dubai launches a new multi-billion dollar leisure and retail project on a par with developments seen prior to the global economic crisis, which badly impacted the real estate market.

The Mohammed Bin Rashid City project, which will include the world's biggest shopping mall and a Universal Studios theme park, was announced by Dubai's ruler Sheikh Mohammed on Saturday.

The Friends Provident report showed that the most popular investment strategies for UAE-based investors were to either take a low risk approach to investing (29 percent) or to hold a balanced investment portfolio (34 percent).

Matthew Waterfield, FPI's general manager, Middle East and Africa said: "The increased preference for investing in property is not surprising as the UAE continues to recover from the financial downturn. This is a sign of confidence returning to the local market."

Compared to similar surveys in Hong Kong and Singapore,  UAE investors considered preservation of their capital a fundamental aspect of their investment planning, with 27 percent of respondents unlikely to invest in anything other a guaranteed product.

Waterfield added: "Considering 68 percent of UAE respondents are non-resident Indian, it is not surprising that the survey shows that UAE investors overall adopt a more cautious and considered approach to their financial planning than their counterparts in Hong Kong and Singapore, who appear more willing to take a speculative approach to investing."

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