Property brokers in Dubai are reporting a rush in sales from Qatari investors attempting to get their assets out of the UAE before the Monday deadline to leave the country.
Brokers say that Qataris in the UAE are selling property portfolios worth millions of dirhams at steep discounts as they rush to liquidate their assets and leave.
“It is an extremely difficult time for many of our Qatari clients,” said Mario Volpi, the chief sales officer at Kensington Exclusive Properties. “We had one guy who managed to sell everything – some town houses in JVC, a plot of land in Dubailand, some commercial units in the Marina and a full building.
“He managed to sell the lot in just a couple of days at probably around 20 per cent below market price, but we have at least two other clients who are trying to sell and can’t,” Mr Volpi said.
On June 5, amid an escalating political dispute, Qatari citizens in the UAE were given 14 days to leave the UAE, while the Government said that Qatari citizens outside the UAE would not be allowed to enter or transit the country.
“We are currently working with a number of Qatari sellers and landlords. As a result of the current situation, some of our clients have either reduced their asking prices or have agreed to a recommended marketing strategy which is more attractive to tenants or buyers,” said Nick Grassick, the managing director of Dubai-based broker PH Real Estate.
“We have seen a lot of Qataris selling up,” another Dubai-based broker said.
“Those with smaller units, which can be sold fast, have managed to sell at between 5 and 10 per cent below market prices. But of course the bigger assets are not that liquid.”
“One Qatari investor sent out a list of 13 properties and managed to sell seven of them the same day,” he said. “One property was sold at 10 to 15 per cent below par in two hours.”
The number of Qataris who own property in Dubai is not a significant proportion of the market.
According to the Dubai Land Department, in 2015 Qataris invested Dh2.8 billion in Dubai property through 799 transactions, comprising 2 per cent of the total Dh135bn transacted that year. Last year, nationals from Qatar and Kuwait combined invested nearly Dh2bn in Dubai property – 0.78 per cent of the total transacted, with Qataris accounting for 1,006 transactions.
“At this time, we can confirm that the current geopolitical situation has not resulted in us seeing any instructions to sell or lease real luxury estate,” said Jason Hayes, the Luxhabitat managing director.
For Qatari citizens who are not currently in the UAE and who wish to sell, the logistics of signing a deal are complicated. Without being allowed into the country, sellers would have to sign a power of attorney to enable a non-Qatari to sell property on their behalf.
However, UAE ministries are unlikely to attest documents from Qataris at present, making it almost impossible for them to sell. Property brokers in London anticipated an increase in demand from Qataris keen to move their cash far away from the Middle East.
“Thus far, a week into the diplomatic crisis, there has been no sudden surge in Qatari requirements,” said Faisal Durrani, the head of research at Cluttons.
“The political rift unfolding in the Arabian Gulf is unprecedented and while the long-term political ramifications are too early to assess, London’s property market may emerge as a beneficiary.
“While we have seen political spats in recent years, the deepening crisis between various Arab states and Qatar has the potential to dramatically cause a seismic shift in property investment capital flows emanating from Qatar, both at an individual and sovereign level. Any impact is, however, likely to be a slow burn, rather than an overnight change,” Mr Durrani said.
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KEY DATES IN AMAZON'S HISTORY
July 5, 1994: Jeff Bezos founds Cadabra Inc, which would later be renamed to Amazon.com, because his lawyer misheard the name as 'cadaver'. In its earliest days, the bookstore operated out of a rented garage in Bellevue, Washington
July 16, 1995: Amazon formally opens as an online bookseller. Fluid Concepts and Creative Analogies: Computer Models of the Fundamental Mechanisms of Thought becomes the first item sold on Amazon
1997: Amazon goes public at $18 a share, which has grown about 1,000 per cent at present. Its highest closing price was $197.85 on June 27, 2024
1998: Amazon acquires IMDb, its first major acquisition. It also starts selling CDs and DVDs
2000: Amazon Marketplace opens, allowing people to sell items on the website
2002: Amazon forms what would become Amazon Web Services, opening the Amazon.com platform to all developers. The cloud unit would follow in 2006
2003: Amazon turns in an annual profit of $75 million, the first time it ended a year in the black
2005: Amazon Prime is introduced, its first-ever subscription service that offered US customers free two-day shipping for $79 a year
2006: Amazon Unbox is unveiled, the company's video service that would later morph into Amazon Instant Video and, ultimately, Amazon Video
2007: Amazon's first hardware product, the Kindle e-reader, is introduced; the Fire TV and Fire Phone would come in 2014. Grocery service Amazon Fresh is also started
2009: Amazon introduces Amazon Basics, its in-house label for a variety of products
2010: The foundations for Amazon Studios were laid. Its first original streaming content debuted in 2013
2011: The Amazon Appstore for Google's Android is launched. It is still unavailable on Apple's iOS
2014: The Amazon Echo is launched, a speaker that acts as a personal digital assistant powered by Alexa
2017: Amazon acquires Whole Foods for $13.7 billion, its biggest acquisition
2018: Amazon's market cap briefly crosses the $1 trillion mark, making it, at the time, only the third company to achieve that milestone
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
The biog
Age: 23
Occupation: Founder of the Studio, formerly an analyst at Cleveland Clinic Abu Dhabi
Education: Bachelor of science in industrial engineering
Favourite hobby: playing the piano
Favourite quote: "There is a key to every door and a dawn to every dark night"
Family: Married and with a daughter
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