The UAE – and the wider GCC region – seems to be currently the focus market for several international real estate biggies for their global expansions – the latest being Australia’s Versatile Group – amidst the start of the new interest rate cut cycle pushing down mortgage rates, triggering the next round of property market boom.
A few big names from Europe and the UK are also mulling expansion into the region, especially Dubai, industry insiders told Arabian Business.
Arabian Business reported on Tuesday that the independent luxury developer, Source of Fate, has ambitious plans to invest approximately $2.7 billion in a series of projects in the UAE.
“We’re open to further opportunities in the Middle East as we believe the region offers significant opportunities for growth, particularly in our industry,” Marco Fahd, Group Chairman and CEO of the Versatile Group, told Arabian Business.
Fahd said the group will undertake new projects in the region, mainly in the UAE and Saudi Arabia, through its arm set up for international expansion.
“Versatile International was specifically established to meet the needs of destination-scale developments [in the Middle East],” the head of the Australian real estate major said.
Besides undertaking mega real estate projects, Versatile also plans to provide end-to-end consultancy, procurement management, and implementation oversight services in the region.
Interest rate cut to slash mortgage rates, triggering new round of real estate boom
Industry experts said that post-interest rate cut by the UAE central bank and other central banks, mortgage rates in the UAE and the region are expected to see a significant fall in the coming months, prompting many leading international real estate players to look to foray into the region with an eye on cashing in on the expected surge in demand for property investments.
These players are eyeing Dubai as their initial destination for expansion, factoring in the continued buoyancy and resilience in the emirate’s property market, they said.
The extremely competitive per square foot cost – despite the recent spike in prices, property prices in Dubai are still estimated to be relatively much cheaper compared to that in London, New York and Singapore – and the high tax-free ROI (return on investment) are cited as the major factors acting as catalysts for the global players who are looking to expand into the city.
Farooq Syed, CEO of Springfield Properties, said the emergence of new areas such as Dubai South with developments such as the $35 billion expansion of Al Maktoum International Airport to make it the world’s largest airport and opening of the new 2,500-seat Opera House aimed to position it as a global cultural hub are further boosting the emirate’s allure to international real estate companies.
“We expect a surge in property values in areas such as Dubai South as these developments mature, attracting leading international real estate companies as well as overseas investors who recognise the long-term growth prospects and capital appreciation opportunities,” he said.
Rachit Pant, Chief Operations Officer at Foremen Fiefdom, said the robust demand for rental properties in Dubai is another key factor for the city’s growing reputation as a global investment hub.
“With a steady influx of expatriates, and a rapidly expanding population, besides government initiatives such as introduction of long-term visa programmes, have further bolstered Dubai’s appeal – to companies and investors globally,” he said.
Pant said despite the increasing costs, the demand for rental properties remains strong, with new listings being quickly absorbed even as the supply grows.
Market analysts project that rental rates could climb by an additional 20 per cent by the end of 2024, driven by continued demand and the city’s dynamic economic environment.
They said Dubai’s real estate market continues to attract high-net-worth individuals (HNWIs) and ultra-high-net-worth individuals (UHNWIs), driving demand for opulent villas and branded residences.
In H1 2024, the city is estimated to have recorded 196 sales exceeding $10 million, reinforcing its status as a premier destination for luxury real estate.
Versatile to try partnerships to accelerate growth plans in the region
The Versatile Group executive said they are also looking for partnership opportunities for investing in the region.
He said the Group, which is also seeking investments from the Middle East for launching real estate projects in Australia, is looking for partners who could provide it with opportunities in the Middle East.
“We are extremely invested in the region and are keen to grow our presence further, so are definitely looking for two-way relationships where both ourselves and our partner can benefit from various opportunities.
“We’ve seen very positive feedback from partners we’ve worked with and are definitely looking forward to expanding our work in the region even further [through partnerships],” Fahd said.
He said the Australian group is already engaged in some high-profile projects, including the prestigious Diriyah Gate Development in Saudi Arabia.
Fabrizio Perilli, Group Managing Director of the Versatile Group, the Group’s experience in the Middle East has been very positive, as investors feel confident with the collaboration approach and trust it to deliver quality projects.
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