Dubai's Real Estate Boom Sparks Creative Buying Strategies

Dubai's real estate market is experiencing a significant boom, leading buyers to adopt creative strategies to capitalize on the surge. As property prices rise, many investors are exploring unconventional approaches such as leveraging financing options, pooling resources, or seeking emerging property markets. These innovative tactics aim to maximize returns in a competitive market, offering both local and international buyers new ways to navigate Dubai's dynamic real estate landscape.

Dubai’s rise as one of the world’s most sought-after property markets is making it increasingly difficult for buyers to enter, sparking renewed interest in real estate investment trusts (REITs) and fractional ownership platforms, with some requiring as little as $136 to get started.

While buying property is the most direct way to access the market, 17 consecutive quarters of rising prices have made it unaffordable for many. Emaar Properties and Tecom Group stocks have seen significant growth, with Emaar surging nearly fivefold since 2020.

In this environment, companies like Stake are gaining popularity, offering a platform for investors to buy property fractions starting at 500 dirhams ($136). The company recently secured funding from Abu Dhabi’s Mubadala Investment Co.

At the same time, real estate investment trusts, which allow investors to benefit from a pool of income-generating properties without owning them directly, are becoming more appealing. The Dubai government is pushing for REIT structures, with Dubai Holding considering listing its residential and retail portfolios as REITs next year. These would offer access to prime assets, including malls and neighborhoods, managed by government-linked developers.

Thierry Delvaux, CEO of Equitativa Group, which manages Emirates REIT, highlighted that REITs provide greater accessibility by allowing investors to participate with smaller amounts of capital.

While the global REIT sector faces challenges, with firms like Blackstone struggling and local REITs posting losses, reforms in the UAE, such as long-term visas for investors and relaxed foreign ownership rules, are creating a more favorable environment for REITs. This is attracting international capital and increasing the investor base.

Dubai’s government also sees REITs as a way to strengthen domestic capital markets, which have become more active in recent years. Samer Deghaili of HSBC sees opportunities for REIT growth in the UAE, backed by strong sponsors and governance.

In addition to REITs, technology-driven property companies are thriving, with platforms like Keyper and Stake raising millions in funding. Stake, for example, has raised $27 million and purchased over 300 properties, offering investors an easy, digital way to invest in Dubai’s real estate market, likened to shopping on Amazon.

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Source: hindustantimes‍