PROPERTY prices in Dubai are still affordable when compared to other global hubs despite surging this year, according to the founder of Emaar Properties.
"You have to look at the prices of a global city like Dubai, compare it globally, prices in Dubai are really such a good deal," Mohamed Alabbar said in a Bloomberg TV interview on Thursday (Nov 3). "Even with the increase, Dubai prices are still reasonable when you compare them with some of the global cities."
The emirate's prime real-estate prices surged more than 70 per cent over the 12 months through September, making it the biggest gainer on Knight Frank's global index, which focuses on a city's most desirable and expensive homes - often the top 5 per cent by market value. That far outstripped a 2.5 per cent rise for London on the index, 8.9 per cent in Paris and 7.3 per cent in New York, where deals have been hampered by higher interest rates and energy-related economic slowdowns.
Dubai's nimble handling of the pandemic helped the city end a years-long property slump and pushed prices higher across most localities. The turnaround this year has been also been fuelled by an influx of rich Russian buyers looking for a safe haven for their money after their country's invasion of Ukraine.
"I think were are at the end of it," Alabbar said, when asked about the influx of Russian money into the city. "Dubai is an international city, there is no one major player that moves it this way or that way."
"A lot of Arabs are moving in, it has a lot of Indians moving in," he said. "Of course we have an increase on the Russians coming in, but the basic market that generates growth to the city, they're always in the same percentages."
"Maybe the Russians have gone from 5 per cent to 10 per cent but the other 90 per cent are still the basic ingredient for the city's growth," Alabbar said.
Meanwhile, the Dubai-based businessman is also preparing for a landmark dual listing of Americana Restaurants International, the operator of KFC and Pizza Hut restaurants across the Middle East and North Africa.
Saudi Arabia's Public Investment Fund and Alabbar will sell a 30 per cent stake in the firm, which Alabbar bought through his private vehicle. "We bought the company five years ago and we put our head down, we've de-listed the company, we've done some re-organisation," he said. "This is a very resilient business."
Americana is part of a late-year rush of IPOs in the Middle East even as markets worldwide are hit by inflation fears and the risk of an economic slowdown. A surge in oil prices at the start of 2022, as well as increased investor inflows, led to a flurry of listings in the Persian Gulf, which notched up its best first half on record for stock-market debuts.
"The UAE and Saudi Arabia really have liquidity, they have depth and a good track record of probably the last few years," Alabbar said. "It's ideal for us to really be able to take advantage of these markets and benefit our shareholders and our customers as well." BLOOMBERG