Dubai's real estate market has been on a roll recently, with property values increasing by 70% in four years. This has caught the attention of Wall Street, and now, Bloomberg reports, some of New York's biggest investment banks want a piece of the action. According to Bloomberg, Brookfield is considering developing a mixed-use community in the Dubai Hills neighborhood, its first investment in the area. Goldman Sachs and Asia-based asset manager Hillhouse Investment have already invested heavily in Dubai real estate.\n\nDubai's luxury residential market is renowned for its celebrity clientele. However, recently, the city's commercial sector has been making headlines. In the last two years, there have been eight office building sales, Bloomberg reports, more than in the prior decade. Hotel transactions have been equally as prolific, with real estate consultancy Knight Frank reporting 15 sales occurring over the last 30 months. \"The past two years have been busier for us than the whole previous decade on the capital market side,\" Andrew Love, head of capital markets and commercial agency at Knight Frank, told Bloomberg. \"Demand is growing from overseas buyers who are coming in search of better returns and lower taxes.\"\n\nLike many major cities, Dubai's real estate market has been on a roller coaster recently. Overbuilding before the financial crash of 2008 led to expat residents escaping the city once they could no longer afford the payments on their debts, Bloomberg says. However, Dubai real estate has been on a tear since the pandemic. The city opened before many other metro areas that were still in lockdown, attracting well-heeled investors to its sunny shores. The city has also benefited from the fallout of the war in Ukraine, with many oligarchs looking to shield cash from sanctions and international governments, Bloomberg reported. Financial firms are also drawn to Dubai's low taxes and central global position.\n\nBrookfield began tentatively exploring the Dubai market in 2020 when the company's asset manager and its partner, Investment Corp. of Dubai, opened Dubai's largest office tower, ICD Brookfield Place, Bloomberg says. It quickly filled, garnering the highest rents in the city, allowing Brookfield to sell 49% of its share in the tower in a deal that saw the building valued at $1.5 billion. Other investors, such as Singapore's Mapletree Investments, are looking to invest around $2 billion, and Goldman Sachs has invested $25 million into hotelier Sunset Hospitality Group. UAE-based investors have also been at the forefront of new construction; Aldar Properties—the city's biggest listed developer—raised $500 million from Apollo Global Management, bringing Apollo's total investment to $1.9 billion since 2022, Bloomberg says.\n\nThere is a shortage of existing cash-flowing buildings for foreign investors to buy in Dubai, as most are owned by wealthy Emirati families or government entities. \"The institutional money wants to be here and is starting to arrive, but the challenge is stock to sell,\" Knight Frank's Love told Bloomberg. \"Most of the offices have been built by government and semi-government entities,\" he added, explaining that the \"lack of Grade A buildings to acquire means there is a lack of market depth, which an institution requires to make it worth their while to enter the market.\"

A Surge In Value Of 70% In 4 Years Sees Wall Street Running To Invest In Dubai Real Estate

Dubai's real estate market has seen a 70% surge in property values over four years, attracting significant investment from Wall Street. Major firms like Brookfield, Goldman Sachs, and Hillhouse Investment are expanding their presence in Dubai, driven by post-pandemic growth, geopolitical factors, and the city's low-tax environment. The market faces challenges due to a shortage of high-quality commercial properties, though institutional investors are increasingly entering the space.