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Dubai-based Azizi Developments is targeting Chinese real estate buyers as Chinese investments into the UAE grow on the back of strong economic and political relations between the two countries.
“Our customer base from China is 2 percent right now, but this could easily be much larger in the future,” the company’s CFO Mika Toivola told Zawya Projects.
The company currently has the majority of its buyers coming from the UAE (26%), India (12%) and Saudi Arabia (9%) among others.
“We have sold to over one hundred different nationalities and it is evolving, given the changing geopolitics and the global economic situation,” he said.
Giving the example of Russian buyers, Toivola said they were big at one point but after the ruble tumbled, they became less prominent.
In January 2017, Dubai-based English language newspaper Gulf News had reported that Russia had dropped from fourth to sixth position on the list of top non-GCC property investors in Dubai after the ruble crisis in 2015.
“They are still there but not at the same level. And, now Chinese are coming into the picture in a bigger way,” the Azizi CFO said.
Chinese investment into the UAE’s real estate sector has seen a spike in recent years, ranking them among the top four nationalities in terms of value in 2018, alongside Indians, British and Pakistanis, according to Dubai Land Department (DLD) data.
The latest available data from DLD data showed that Chinese nationals accounted for 1.7 billion UAE dirhams ($463 million) worth of property transactions in the first nine months of 2018.
Azizi’s CEO Farhad Azizi had told Zawya Projects in October 2019 that strengthening of bilateral ties and the UAE’s emergence as a regional hub for China’s Belt and Road Initiative (BRI) has helped attracted Chinese investment into Dubai real estate.
He had noted that depreciation of the Renminbi, as well as the promising rental yields in Dubai, influenced Chinese investors’ demand in properties in the emirate.
While last year’s investment numbers haven’t been released yet, UAE-based real estate broker Fidu Properties forecasted in June 2019 statement that Chinese investments in Dubai real estate would top 70 percent in 2019, after the DLD set a target of attracting one billion dirhams ($272 million) inward investment from China for the year.
“We believe it's going to increase as it's pretty obvious that Indian and Chinese ownerships will increase in this region,” said Toivola.
The developer, which has a dedicated research and development department to study market trends and understand customer needs, would be tailoring its offerings to the specific needs of Chinese buyers, CEO Azizi had said in October.
DLD, which participated at the 20th Luxury Property Show in Shanghai last month, said in a statement that it received around 10,000 enquiries from Chinese investors. It said the reasons behind Chinese investors choosing Dubai’s real estate market as an investment destination were high returns on investment, security and stability and proximity to China.
The DLD statement also revealed that the volume of investments that the individual Chinese investor is willing to inject into Dubai’s real estate market ranged from $300,000-$1.2 million.
(Reporting by Syed Ameen Kader; Editing by Anoop Menon)
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