Interest from Iran in Dubai’s real estate sector is expected to increase, according to a recent research note from Core, UAE associate of Savills.
After sanctions were lifted at the start of the year, and following elections in the country last month, experts are predicting a growing influence on the global economy and, in particular, the Middle Eastern markets.
Iran, with a USD 417 billion economy, is one of the last untapped emerging markets and the second largest in the Middle East after Saudi Arabia. From a current almost zero GDP growth, Moody’s and the IMF project a 5% growth in 2016-17 underpinned by the release of frozen funds overseas, the implementation of investment plans as well as a recovery in oil production.
David Godchaux, CEO of Core, UAE associate of Savills, says it could be a mutually beneficial arrangement. “Dubai, with its existing trade network with Iran and its position as a global logistics hub, can function as a doorstep for the world looking out to invest and service this developing nation. Given its geographical proximity, political stability and quality real estate, Dubai has been a favorable destination for Iranian investors for both mortgage and foreign investments.”
According to Dubai Land Department, Iran was the fourth largest expat nation by investment size and the first by average investment size (AED 2.5 million).
David added: “With a surge in investor sentiment and a notable increase in enquiries from Iranian investors, these numbers are expected to go higher in the coming years.”
However, he cautioned: “That said, Iran’s key driver remains political, in particular whether it will continue to meet its obligations under the sanction agreement and whether other countries will continue to agree that it has done so to keep it up on its path to progress.”
As one of the largest UAE property services firms, Core Real Estate, the Savills associate, combines unrivalled local market insight with the international strength provided by 600 global offices.
As a full-service real estate business, working with occupiers, investors and developers of residential and commercial real estate in Dubai and Abu Dhabi, we provide integrated expertise across all property sectors, including: offices, prime residential, international residential, retail, hotels and industrial logistics.