Business & Investment

Rich Russians fleeing sanctions are pushing Dubai’s real estate sector

According to the Dubai Land Department, Dubai has seen the hottest real estate market in recent years, with sales in this sector increasing 45% year-on-year in April and 51% in May.

Dubai, United Arab Emirates-Dubai real estate company Mira Estate team has a reason to celebrate.

Luxury real estate companies recorded a 100% year-on-year increase in sales to buyers from Russia and other former Soviet countries in the first half of 2022.

According to a company press release issued this week, the company, which specializes in Russian-speaking clients, has doubled its asset sales to these people, doubling year-on-year to 2 billion dirhams, or $ 500 million.

At a fashionable Dubai nightclub in May, another brokerage Russian realtor pops a bottle of champagne and pays a record fee for selling to fellow citizens buying their first home in a desert oasis. I celebrated that. A saleswoman collected a commission of 4 million dirhams in just three months, according to a colleague who spoke anonymously to CNBC in light of expert restrictions.

Roman Abramovich, a former owner of the Chelsea Football Club and a longtime companion to Russian President Vladimirputin, a billionaire oligarch, is an iconic artificial island archipelago designed to look like a palm tree. It is reported that he is looking for a house in Palm Jumeirah, Dubai. The $ 350 million big private jet landed in the Emirate for about four months after the US Department of Justice approved its seizure.

Roman Abramovich, a former owner of the Chelsea Football Club and a longtime companion to Russian President Vladimirputin, Oligalhi of Billionaire, is an iconic artificial island of artificial islands designed to look like a palm tree. It is reported that he is looking for a house in Palm Jumeirah, Dubai.

Heider Yusuf | Herara | Getty Images

The influx of buyers from Russia and from the Commonwealth of Independent States (CIS) is a group of nine former Soviet countries across Eastern Europe, the Caucasus and Central Asia, boosting the real estate sector in the United Arab Emirates. About Russia’s invasion of Ukraine and subsequent western sanctions.

While many countries have imposed sanctions and foreclosures on wealthy Russians and Putin-related individuals, causing millions of dollars in wealth to be lost in cities such as London and Paris, the UAE has been operating. I’m continuing.

“The war in Ukraine and the impact of sanctions on Russian-speaking individuals and their facilities have forced wealthy CIS investors to flee their country and find shelters in Dubai,” said Tamara Getige, CEO of Mira Estate. Jeva said in a company announcement.

“CIS billionaires and entrepreneurs are flocking to the UAE in record numbers, and real estate demand is skyrocketing. Most homebuyers are looking for ready-to-use units and waterfront properties.”

A luxury villa swimming pool for sale in Palm Jumeirah, Dubai on May 19, 2021.

GIUSEPPE CACACE | AFP via Getty Images

Indeed, according to the Dubai Land Department, Dubai has seen the hottest real estate market in recent years, with sales in this sector increasing 45% year-on-year in April and 51% in May.

After a plunge at the start of the pandemic, the UAE’s glamorous commercial hub recovered steadily after taking a more relaxed approach to the Covid-19 pandemic, as other markets still imposed strict restrictions. .. The Arab Emirates offers new visa opportunities for long-term residents and remote workers, signs a historic normalization agreement with Israel, liberalizes some of its social rules, and islamic Friday. Switched from Saturday weekend to Saturday to Sunday weekend.

However, after Putin’s brutal invasion of neighboring countries in late February, many of the wealthy world closed the door to Russians, so the decision to remain neutral was made by 90% of the foreign population, Tax Haven. It has been particularly successful for the UAE, which boasts a reputation for its position and financial secrets. It makes it very attractive to many of the world’s wealthiest people.

Super rich destination

Dubai brokerage firm Betterhomes found in a ranking released in April that Russians rose second in the first quarter to become the fifth-highest buyer of Dubai real estate. In June, London-based investment firm Henry & Partners predicted that the UAE would become the world’s top destination for ultra-high net worth individuals this year, accepting 4,000 new millionaires. We have published a report.

Meanwhile, Russia is set to lose 15,000 millionaires, according to a company survey.

“UAE’s roots are now becoming an integral part of the portfolio of all HNWI investors,” Henry & Partners’ managing partner Philippe Amarante wrote in a report.

Journalist and author of the book McMafia, Misha Glenny wrote in a Henry & Partners post: “The UAE has seen a surge in high net worth migration rates, primarily to Abu Dhabi and Dubai.”

Christopher Pike | Bloomberg | Getty Images

Journalist and author of the book McMafia, Misha Glenny wrote in a Henry & Partners post: “The UAE has seen a surge in high net worth migration rates, primarily to Abu Dhabi and Dubai.”

“Wealthy Russians trying to escape the impact of devastating western sanctions on their country have begun to move to the UAE and Israel,” Grennie added. The latter is the fourth on the company’s destination list.

Villa on the water

People working in this business also say that there is a clear tendency for Russian buyers to choose what kind of property.

“Most of the time, luxury properties, especially anything around the ocean,” Tahir Magisia, managing partner of Dubai-based Prime Capital Real Estate, told CNBC. He named the luxury Emar beachfront and La Mer properties along the city’s coast, as well as popular areas like Palm Jumeirah.

“What’s on the waterfront with a view is always their number one priority.“”

Residential villa on the waterfront of Palm Jumeirah, Dubai, February 24, 2022. According to Tahir Magisia, Managing Partner of Dubai-based Prime Capital Real Estate, Russians have always been one of the top 10 countries to invest in Dubai real estate.

Christopher Pike / Bloomberg via Getty Images

According to Magisia, buyers want a combination of real estate to own and rent, not only for investment but also for personal use, but most are for investment. “Block deals” where buyers buy the entire floor or more are very common. He said that the first floor of a luxury condominium costs about $ 7 to $ 10 million on average, but this of course depends on location and size.

According to Magisia, Russians have always been one of the top 10 countries investing in Dubai real estate. However, he said it has surged since February, adding that “we also noticed that some of these buyers have liquidated their assets in other countries and are transferring their money here.”

He said that many Russian buyers are also buying in cryptocurrencies as some of Dubai’s major real estate companies have begun accepting payments in digital currencies.

Accusation of “dirty money”

United Arab Emirates authorities have promised to tackle illegal money flows as the country is stepping up reforms to meet international standards.

Meanwhile, the economy is booming.

“I’m sure many Russians are trying to solve their problems and their problems, but Dubai will ultimately benefit from any crisis,” said Emiratis real estate giant Hussein Sajiwani. I told CNBC in an interview in mid-March.

“I will be honest with you, these sanctions … they strained a lot of people,” Sajwani said at the time. “If someone brings money legally and professionally through the banking system here, we will do business with them.”

Rich Russians fleeing sanctions are pushing Dubai’s real estate sector

https://www.cnbc.com/2022/07/07/rich-russians-fleeing-sanctions-are-pumping-up-dubais-property-sector.html Rich Russians fleeing sanctions are pushing Dubai’s real estate sector

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