Dubai developers target UK investors amid Brexit volatility

A remote property management system announced by the Dubai government is expected to reassure overseas investors. The Mashrooi system includes a dedicated judicial authority to regulate the emirate’s property sector. (Shutterstock)
Updated 19 November 2018
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Dubai developers target UK investors amid Brexit volatility

  • Some Dubai developers, which have experienced their own property slowdown over the last four years, see UK property weakness and sterling volatility as a potential sales opportunity
  • House prices across the UK are rising at the slowest annual pace since 2013

LONDON: Dubai developers are targeting UK investors as Brexit shakes confidence in British bricks and mortar.

The Dubai Property Show (DPS) kicked off on Friday at London’s Olympia Exhibition Centre amid a Brexit-fueled political storm and attempts to unseat Prime Minister Theresa May by politicians from her own party.

House prices across the UK are rising at the slowest annual pace since 2013 according to data from Nationwide published earlier this month, with fresh concerns emerging over what a no-deal Brexit would mean for UK property values.

Some Dubai developers, which have experienced their own property slowdown over the last four years, see UK property weakness and sterling volatility as a potential sales opportunity.

Samir Jalali was among the visitors to the London event, looking for potential investments for a client, one of the world’s largest rice dealers.

They were interested in “signature” properties, he said, adding: “Dubai is still one of those desirable destinations. This is a good time and opportunity to acquire property for a year or two.”

At the Hera Tower stand, business was brisk.

“Lots of inquiries, but no, nobody has bought yet,” said one of the young women buttonholing the passers-by. 

The development overlooking the canal near Dubai Sports City is three-quarters built and is due to be completed in June. Prices vary from £78,892 ($101,193) for a studio to £155,523 for a two-bedroom apartment, and the company claims to guarantee returns of at least 6 percent on rental.

The British are regularly among the top three investor groups from outside the Middle East. 

Aqil Kazim, chief commercial officer of Nakheel, the developer behind Dubai’s famous Palm Islands, said the company had 2,530 British investors who have spent £1.3 billion on property.

“The momentum is still there for innovative projects like ours. With currency shifts against the dollar, Dubai can be a positive alternative, a reliable place to invest.”

That optimism is reinforced by the Dubai government’s announcement of Mashrooi — a remote property management system, complete with its own dedicated judicial authority to regulate the property sector, aimed at reassuring overseas investors. 

The move should make foreigners more confident about buying property in Dubai, said Kazim.

“It means owners from overseas don’t even have to be in Dubai to manage their property. Tenancy disputes will be dealt with within a dedicated judicial and legal system instead of taking forever through the ordinary courts,” said Kazim. “It makes the rental property sector very transparent. Nakheel certainly welcomes it as being of benefit.”

The introduction of Mashrooi was announced in the emirate last week. Tala Khalifa Al-Suwaidi, of the Dubai Land Department, said Mashrooi was due to come into operation in the first quarter of next year. 

“It is all absolutely secure legally because this comes from the government of Dubai, ” he told Arab News. “Everything any investor wants to know about buying and managing property in Dubai, he can find out through Mashrooi, which means the information will be coming from the government of Dubai.”

Nakheel currently has £12 billion worth of property for sale, ranging from high-end luxury homes to “stylish, functional” accommodation for lower budgets.

Apartments in the 52-story Palm Tower (with an infinity pool on the 50th floor and views over the whole Palm complex) start at £345,000 for a studio. The tower is due to be completed in late 2019.

Nick Sajid, director of Invest Property, was also shopping for clients at the DPS and making contacts.

“Dubai is a global destination. It has the panache that London had until values got too high,” he said. The property market had also “matured” a great deal in the past 15 years.

“It used to be that everything was in the hands of just a couple of names. It was oligopolistic. Now there is balance in competition and the prices have been corrected. It is a safe bet,” he said.


Foreign investors hope India dials back policy shocks after Modi win

Updated 24 May 2019
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Foreign investors hope India dials back policy shocks after Modi win

  • Modi’s pro-business image and India’s youthful population have lured foreign investors
  • After Modi’s win, about a dozen officials of foreign companies in India and their advisers said they hoped he would ease his stance and dilute some of the policies

NEW DELHI: Foreign companies in India have welcomed Prime Minister Narendra Modi’s election victory for the political stability it brings, but now they need to see him soften a protectionist stance adopted in the past year.
Modi’s pro-business image and India’s youthful population have lured foreign investors, with US firms such as Amazon.com , Walmart and Mastercard committing billions of dollars in investments and ramping up hiring.
India is also the biggest market by users for firms such as Facebook Inc, and its subsidiary, WhatsApp.
But from around 2017, critics say, the Hindu nationalist leader took a harder, protectionist line on sectors such as e-commerce and technology, crafting some policies that appeared to aim at whipping up patriotic fervor ahead of elections.

Opinion

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“I hope he’s now back to wooing businesses,” said Prasanto Roy, a technology policy analyst based in New Delhi, who advises global tech firms.
“Global firms remain deeply concerned about the lack of policy stability or predictability, this has sent a worrying message to global investors.”
India stuck to its policies despite protests and aggressive lobbying by the United States government, US-India trade bodies and companies themselves.
Small hurdles
Modi was set to hold talks on Friday to form a new cabinet after election panel data showed his Bharatiya Janata Party had won 302 of the 542 seats at stake and was leading in one more, up from the 282 it won in 2014.
After Modi’s win, about a dozen officials of foreign companies in India and their advisers told Reuters they hoped he would ease his stance and dilute some of the policies.
Other investors hope the government will avoid sudden policy changes on investment and regulation that catch them off guard and prove very costly, urging instead industry-wide consultation that permits time to prepare.
Protectionism concerns “are small hurdles you have to go through,” however, said Prem Watsa, the chairman of Canadian diversified investment firm Fairfax Financial, which has investments of $5 billion in India.
“There will be more business-friendly policies and more private enterprise coming into India,” he told Reuters in an interview.
Tech, healthcare and beyond
Among the firms looking for more friendly steps are global payments companies that had benefited since 2016 from Modi’s push for electronic payments instead of cash.
Last year, however, firms such as Mastercard and Visa were asked to store more of their data in India, to allow “unfettered supervisory access,” a change that prompted WhatsApp to delay plans for a payments service.
Modi’s government has also drafted a law to clamp similar stringent data norms on the entire sector.
But abrupt changes to rules on foreign investment in e-commerce stoked alarm at firms such as Amazon, which saw India operations disrupted briefly in February, and Walmart, just months after it invested $16 billion in India’s Flipkart.
Policy changes also hurt foreign players in the $5-billion medical device industry, such as Abbott Laboratories, Boston Scientific and Johnson & Johnson, following 2017 price caps on products such as heart stents and knee implants.
Modi’s government said the move aimed to help poor patients and curb profiteering, but the US government and lobby groups said it harmed innovation, profits and investment plans.
“If foreign companies see their future in this country on a long-term basis...they will have to look at the interests of the people,” Ashwani MaHajjan, an official of a nationalist group that pushed for some of the measures, told Reuters.
That view was echoed this week by two policymakers who said government policies will focus on strengthening India’s own companies, while providing foreign players with adequate opportunities for growth.
Such comments worry foreign executives who fear Modi is not about to change his protectionist stance in a hurry, with one offical of a US tech firm saying, “I’d rather be more worried than be optimistic.”