Dubai real estate: Family offices new target for high-value property investments

The rising trend is leading to a surge in opening of foundations and entities connected to prominent family businesses and individuals at the Dubai International Financial Centre (DIFC).

Meanwhile, the real estate sector in the emirate, especially the residential sector, is expected to see ‘weather-proofing’ of investments, with several leading real estate companies majors are said to be investing in climate-resilient designs in the wake of the recent extreme weather incidents.

“The rise of family offices in Dubai signifies a growing recognition of the importance of tailored wealth management solutions for affluent families,” Sachin Kumar Singh, Business Head and Managing Partner at Foremen Fiefdom, a leading Dubai-based real estate service provider, said.

“These offices provide the ultra-high-net-worth individuals (UHNWIs) and high-net-worth individuals (HNWIs) [from around the world and also from the region] with the resources and expertise needed to effectively manage and grow their wealth, ensuring a sustainable legacy for future generations,” he said.

At the last count, as many as 440 registered foundations and more than 600 active entities connected to prominent family businesses and individuals are estimated to have been located at the DIFC, which is becoming a focal point for family office activities in Dubai.

Dubai’s wealth influx

Industry insiders said the continued influx of billionaires, centi-millionaires and high-net-worth individuals add to aiding the family offices’ rising role in attracting and managing investment activities of the rich and famous.

According to the World’s Wealthiest Cities Report 2023, Dubai is home to approximately 68,500 HNWIs, 206 centi-millionaires, and 15 billionaires, making it a highly attractive destination for wealth management and investment opportunities.

Singh said the UAE has long been recognised as the primary hub for business and investment in the GCC and wider MENA region.

With its strategic location, business-friendly environment, and commitment to innovation, the UAE is poised to become the regional centre for family businesses, further driving the growth of investments, especially in the real estate sector, he said.

“As Dubai continues to evolve into a hub for personal and multi-generational financial services, the establishment of single or multi-family offices within the DIFC has been actively encouraged,” the Foremen Fiefdom senior executive said.

Move to ‘weather-proof’ investments

Singh said Dubai – as well as many other cities in the UAE – could soon expect to see a new trend of developers incorporating climate-resilient designs in their projects, especially residential projects.

“This is aimed at ‘weather-proofing’ investments in the sector,” he said.

Industry experts said the recent extreme weather incidents highlighted the need for the incorporation of climate-resilient designs in real estate projects as an additional measure to both re-assure investors and also to protect their investments.

“Dubai – as also many other parts of the region – faces formidable challenges from its scorching summers, threat of rising sea levels, and, of late, of flooding,” said a senior executive at a city-based proptech, who wished not to be identified, adding that such developments could impact the real estate sector.

Research indicates that climate change could jeopardise coastal properties, leading to authorities in many places around the world, including in the UAE, taking measures to mitigate climate change impact, and also actively promoting sustainable development models.

As part of these efforts, the Dubai government is also incentivising the construction of green buildings.

“By prioritising climate-resilient infrastructure and properties, we can forge a sustainable path for Dubai’s real estate market, ensuring its allure for residents seeking a comfortable, progressive lifestyle,” Foremen Fiefdom’s Singh said.