Money talks at London’s Dubai Property Show

LONDON // Dubai may be known for its colourful and occasionally wacky property developments, but investors at a UK real estate show had something much more sensible on their minds – rental yields.

Property developers in Dubai have resorted to a range of tactics to lure buyers, from Porsches to promising outlandish features such as tropical rainforests.

But such extravagances were not high on the agendas of investors at the first Dubai Property Show in London, who stepped in from the grey drizzle to seek an investment opportunity in the sun.

Strong rental yields and the hope of capital appreciation was driving much of the interest at the London show, said one exhibitor.

“They are very careful customers, but at the same time they see that there is a good appreciation value,” said Yousuf Kazim, the chief executive of Jumeirah Golf Estates.

“For rental it’s a fantastic opportunity … the yields are very good.”

High property prices mean that gross rental yields stand at about 3.5 per cent in central London, but up to 6 per cent in Dubai, according to market data.

Rakesh Mirchandani, the director of KGR Real Estate, a Dubai-based broker, said that high London property prices were also giving a boost to the Dubai market.

“There is a good response for property in Dubai,” he added. “We’ve noticed that prices are dropping 5 to 10 per cent, so it’s a good time to buy.”

Mr Mirchandani accompanied a client to the Dubai Property Show, where she bought a unit at Emaar’s newly launched Acacia at Park Heights development.

An Emaar sales representative said that sales were good. “Instead of selling in two hours, we’re selling in two weeks – but it’s still selling,” the representative said.

British buyers are the second-largest group of foreign property investors in Dubai, after Indians. Last year they made purchases totalling Dh9.3 billion, a decline on the Dh10.4bn spent in 2013, according to the Dubai Land Department.

Sultan Butti bin Mejren, the general director of the Dubai Land Department, said he expects demand from British investors to increase. “Of course, investors may have certain cautions. But they know where they are going to invest, about the Dubai market and the investment opportunities,” he said.

Mazz Ali, a senior client manager at Golden Wave Properties, a brokerage-turned-property developer, said investors showed a healthy interest on the first day of the show, with more than 70 people expressing an interest in buying.

He estimates that Dubai property prices fell 15 to 20 per cent in the last quarter of last year, meaning that people were looking for a bargain. “People are cautious, but they are looking for a deal,” he said.

Pran Padhiar, a 64-year-old Briton, was looking for an investment property at the London show. He invested in properties in Business Bay and Sports City back in 2006, but says the subsequent roller-coaster ride in Dubai property prices has not put him off. “No matter which city you’re in, this sort of thing is going to happen,” he said. “Dubai is back on its feet, so we’re having a look.”

But rental yields were not the prime reason for attending the Dubai Property Show for the UK residents Giles, 42, and Jutta, 38. They were shopping for a two or three-bedroom apartment in Dubai, where they hope to relocate in seven years’ time.

“This is a brilliant investment in the long term,” said Giles. “I just wish I’d done it back in 2010.”

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