Property developers from Dubai taking part in a real estate exhibition in Mumbai remained upbeat on India as a source market for buyers, despite factors including a weak rupee and slowing growth in Asia'a third-largest economy.
“India and the UAE have a very close relationship traditionally,” said Sunil Gomes, the chief executive of Gemini Property Developers, based in Dubai. “The number of Indian buyers has grown dramatically in recent years.”
The three-day annual Dubai Property Show, organised by the Dubai Land Department, which finishes today in India's financial capital, is being held as forecasts suggest real estate prices in Dubai could be further subdued next year amid an expected surge in supply.
Indian nationals are the biggest foreign investors in the property market in the emirate. A total of 3,696 Indian investors invested Dh8.17 billion into real estate in Dubai in the first nine months of this year across 4,414 investments, according to figures from the Dubai Land Department.
But serious buyers seemed a little thin on ground at the show on Saturday afternoon. One sales executive for a major developer at the event said “things are a bit slow” and this could be due to the fact that “the rupee is down”, he said. The currency has fallen by about 10 per cent against the US dollar this year, which makes it more expensive for Indians to buy property in the UAE. The executive added that the ongoing Indian wedding season meant some potential customers had been unable to make it to the event.
There were interested buyers, however.
S Khan, a Mumbai-based steel trader who was browsing properties at the exhibition, said he was eager to purchase a one-bedroom apartment and make a permanent move to Dubai to escape India's economic challenges.
“A lot of things are going around in India, which are affecting India a lot at the moment,” he said.
Official data for the quarter to the end of September revealed that India's GDP growth slowed to a weaker than expected 7.1 per cent, compared to 8.2 per cent in the previous quarter, impacted by higher oil prices and a liquidity crunch linked to the non-banking financial sector.
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Nakheel and Falconcity of Wonders were among the UAE developers present at the Dubai Property Show. Companies advertised deals including payment plans and rental guarantees in an effort to lure customers.
A report by real estate portal Propertyfinder released last month projected that higher oil prices and a construction boom in the run up to Expo 2020 would boost real estate expansion in Dubai in 2019, with the increase in supply expected to impact prices year-on-year.
Sanjay Manchanda, the chief executive of Nakheel, said Indian investors make up more than 10 per cent of the company's customer base, and that it was looking to grow its number of Indian investors, who have already bought more than 4,500 of its properties, worth about $2.5bn.
He said that “regulations allowing international investors to buy freely, strict policies that ensure that disputes are settled quickly and fairly, and impressive rental yields of 6 per cent and above”, were factors helping to attract investor interest.
Ali Murtuza Sulaman, a Mumbai-based property broker, said subdued prices in Dubai and better returns compared to India's real estate market, would help generate sales.
“We think that the returns on investment in Dubai are an advantage for any Indian buyer,” he said.
UAE currency: the story behind the money in your pockets
Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
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Director: Joyce Bernal
Starring: Sarah Geronimo, James Reid, Xian Lim, Nova Villa
3/5
(Tagalog with Eng/Ar subtitles)
2025 Fifa Club World Cup groups
Group A: Palmeiras, Porto, Al Ahly, Inter Miami.
Group B: Paris Saint-Germain, Atletico Madrid, Botafogo, Seattle.
Group C: Bayern Munich, Auckland City, Boca Juniors, Benfica.
Group D: Flamengo, ES Tunis, Chelsea, (Leon banned).
Group E: River Plate, Urawa, Monterrey, Inter Milan.
Group F: Fluminense, Borussia Dortmund, Ulsan, Mamelodi Sundowns.
Group G: Manchester City, Wydad, Al Ain, Juventus.
Group H: Real Madrid, Al Hilal, Pachuca, Salzburg.
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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Europe’s rearming plan
- Suspend strict budget rules to allow member countries to step up defence spending
- Create new "instrument" providing €150 billion of loans to member countries for defence investment
- Use the existing EU budget to direct more funds towards defence-related investment
- Engage the bloc's European Investment Bank to drop limits on lending to defence firms
- Create a savings and investments union to help companies access capital
NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
Padmaavat
Director: Sanjay Leela Bhansali
Starring: Ranveer Singh, Deepika Padukone, Shahid Kapoor, Jim Sarbh
3.5/5
