Post demonetisation, Dubai remains hot destination for Indian RE investors, say experts

MUMBAI: The UAE real estate sector may have felt the after-shocks of India’s demonetisation move with some cancellations being reported in bookings, but the real estate experts are bullish for a mid-to-long term positive effect.

Speaking ahead of the 2nd edition of Dubai Property Show (DPS) Mumbai, to be held at Bandra Kurla Complex (BKC) in Mumbai from December 9 to 11, 2016, Mr.Kalpesh Sampat, COO of SPF, a leading premium real estate consultancy in the GCC, said, “Indians have historically been the highest foreign investors in the UAE, particularly in Dubai. In 2016 first half, Indian nationals contributed the lion’s share of investments – AED7 billion ($1.9 billion) from 3,656 transactions, according to the Dubai Land Department (DLD) statistics, making them the biggest investors in Dubai real estate over the period.”

The DPS Mumbai will showcase Dubai’s premium properties catering to a wide range of budgets. SPF, being the only full-scale property consultant from the UAE at the exhibition, brings Dubai’s best to Mumbai’s elite lining up more than 20 projects and several ready properties to choose from.

“As a proud homegrown company of Dubai, we realize the potential this city has to offer, and we want to share that potential with Indian property buyers. From the best rental returns in the world and high capital appreciation rates, Dubai is the best place for Indian buyers for overseas investment,” Mr. Sampat added.

Pointing out that Indian investment grew in double digit on year-on-year basis, CEO of SPF Realty, Mr Ranjeet Chavan, said the UAE remains a very attractive destination for Indian nationals due to the proximity to the sub-continent. “Dubai is among the top 3 preferred destination to buy property abroad for Indian investors,” he said.

Looking at the recent turn of events in India, they viewed the demonetisation impact as `mid-to long-term positive,’ as they hoped that Indian customers would start diversifying away from investing entirely in India, where the Real Estate valuations will be significantly challenged. Compared to other countries, UAE does do not have a fiscal regime, nor levy any personal or capital gains taxes.

According to them, the current real estate sector scenario in Dubai can mostly be explained through demand and supply. Demand is very healthy and frankly there isn’t enough supply. Dubai’s population grows 7 per cent, but the supply of ready-to-move units is much lower in proportion.

The five-year growth rate (CAGR) forecast in the sector based on the supply pipeline estimates is 2.8 per cent, while the demand is expected to grow at a robust 5.8 per cent, owing to the job expansion plans across sectors due to the upcoming Expo 2020, said the leading real estate players in the UAE. The key segments that show progressive growth trend are affordable and low income housing, followed by mid-segment which are showing tremendous growth rates. Demand for townhouses and villas is also increasing in up and coming areas of Dubai.

As to whether the sector is facing stress like many other sectors, Mr. Chavan said: “Not really. It’s not going up exponentially, but it is stable and increasing gradually. This is just a sign of a maturing industry, which in the long run is a good thing.”

“Consumers are still renting and buying, and the way the supply is going, the property prices are definitely going to increase. This is the right time to buy. Transactions have improved from a year ago as new supply comes into the market, with many projects handing over in the second half of 2016. Affordable segment in particular is growing exponentially, as more and more people want to buy over renting. Even for investors, the affordable segment offers fantastic rental returns, averaging at 6 to 8 per cent,” he added.

Commenting on SPF’s participation at DPS Mumbai, Ms. Mansi Saxena, Marketing Director at SPF, said, “There will be a host of options available for visitors of SPF stand D4C. Whether it’s someone looking to make a long-term investment in an off-plan property, or someone ready to move in instantly, there will be a range of selections that would suit anyone’s needs. We offer everything from convenient and affordable studio, 1 and 2 bedrooms, to generously spaced townhouses in beautiful communities to luxury villas and penthouses located in Dubai’s most upscale areas.”

“SPF has all of Dubai covered in terms of the number of projects, and we promise the same at the Dubai Property Show. Our offerings stretch across Dubai with properties available in areas such as Dubai Marina, Palm Jumeirah, Downtown Dubai, International City, Emirates Living, Mohammad Bin Rashid Al Maktoum City (MBR City), Dubai Creek, Dubai Canal and several more,” she added.

“At Dubai Property Show-Mumbai, the buyers would also have the opportunity to exclusively look at Sobha Hartland’s project showcased at the SPF stand. Some other notable developers whose projects we are showcasing are Nshama, G&Co., Shaporji Palonji, Anantara and Muraba developers,” Ms. Saxena further said.

The key triggers that attract Indians to Dubai are the burgeoning Indian diaspora, attractive rental returns, high capital returns, ease of buying property and the regulations of real estate authorities in Dubai vs. India, property-based visas, and the growth of Dubai as a hub, given the upcoming Expo 2020. In addition to that, with the real estate sector suffering in India at the moment, Dubai remains as a very attractive investment destination.

“Additionally, given the fact that India remains a key geography for us, increased marketing spends and awareness about investing in Dubai is likely to contribute to more and more investment from Indians” she added.

They said that they are committed to go ahead as the monetization drive will have a temporary effect. “We will continue to provide instant exceptional service, to every customer. We have never seen any challenges, due to market conditions. People need homes. Our job is to find them the homes - for rent or purchase or end use or investment. Indeed, when such opportunities arise, we look at lateral solutions to offset a temporary decline in demand by servicing the bulk requirements of REITs, Funds, corporates etc.,” they concluded.

SPF is known to set new benchmarks in the real estate consultancy service in the Dubai market and beyond. The company has achieved outstanding growth by acting as an extended arm of several premium developers in the UAE and overseas markets.