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Norwegians were the second biggest recorded buyers of commercial real estate in Dubai in the second quarter of 2023 after Indians, with the UK, France and Russia making up the remainder of the top five, according to a real estate company’s data.
CRC, an affiliate of Betterhomes, said two Norwegian investors had made acquisitions comprising multiple units during the quarter, making them the second largest buyers in the commercial category recorded by the agency.
The company declined to reveal specifics about the acquisitions, but the increased presence of Norwegian entities as buyers of commercial real estate marks a change from the first quarter of 2023, when Indians were the top buyers, followed by Canadians at number two, then buyers from Azerbaijan, the UK and Lebanon.
While Indians also took the top spot for the full year of 2022 at 27%, buyers from the UK were the second largest group, followed by Jordanian, Russian and then Portuguese investors.
Norway number crunching
Norway, which has a population of 5.4 million people, has a sovereign wealth fund which is one of the world’s largest investors, valued at $1.4 trillion, and is ranked 11 in the world for GDP per capita, while Qatar is number one and the UAE and Kuwait are both in the top 10.
The Scandinavian country exported $395.78 million worth of goods to the UAE in 2022, according to Trading Economics data.
Dubai Multi Commodities Centre (DMCC) signed an MOU with Fresh Water Norway last year to explore expanding the water supply chain and bolstering water security in the region.
Dubai office sales
Dubai saw 754 office sales transactions in the second quarter of 2023, up 49% YoY, with the value up by 32% to 1.154 billion dirhams ($314 million), according to Property Monitor data.
The data showed Business Bay had the largest number of office sales transactions, followed by Jumeirah Lakes Towers and Jumeirah Village Circle, while Mohammed bin Rashid City saw the highest number of retail sector property sales, followed by International City, with Jumeirah Village Circle also seeing the third highest number of retail sales transactions.
Dubai commercial sector
Dubai Land Department data revealed the number of commercial sales transactions overall was up by 22% year-on-year to 3,080, while the total value of transactions was up by 101% to AED 21.385 billion.
The majority of CRC’s commercial real estate buyers, 96%, were end users, with the remaining 4% investors.
CRC saw a 12% decline in the volume of commercial leasing transactions, which the realtor said was evidenced by the majority of buyers being end users, indicating that business owners are expressing a solid preference for buying over renting.
“This suggests a growing confidence in Dubai's long-term prospects after the uncertainties of the Covid era,” the CRC report said.
Despite the introduction of the UAE’s corporate tax, effective last month, the UAE’s tax rate remains the second lowest in GCC, after Bahrain, CRC said, which means the introduction of the tax is unlikely to adversely impact business growth or foreign direct investment (FDI).
“The market attracted significant buyer demand, with notable increases in transaction volumes and values. However, the overall leasing market experienced a decrease in transactions, highlighting potential challenges in the current market landscape. Nonetheless, the top office communities continued to generate interest among tenants, and lease listings remained active,” CRC concluded.
(Reporting by Imogen Lillywhite; editing by Brinda Darasha)
