Jeff Vasishta
4 min read
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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 (NYSE:GS) and Asia-based asset manager Hillhouse Investment have already invested heavily in Dubai real estate.
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Dubai'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."
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Like 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.
