African investors deploy funds in Dubai property
Since the advent of freehold laws, the Dubai real estate market has been seeing funds flowing in from Africa, mostly from retail investors. However, the sector is now seeing active interest from listed African institutional investors as well. These effectively represent REIT-based structures that are listed on exchanges.
These institutional investors are mostly looking to purchase retail and office space in Dubai. This is because such buildings offer a stable tenant base and the lease duration is longer, thus offering a greater visibility of cash flow. African investors typically tend to invest in such asset classes in their home countries as well.
Market stakeholders cite an instance of Turnstar Holdings Ltd, a firm listed on the Botswana Stock Exchange, purchasing a ready, fully leased office building in Dubailand’s Majan cluster for approximately $100 million. There are also funds seeking out buildings in other Dubailand clusters as well as Jumeirah Village. Some of them are even bringing in cash flow to developers as per construction timelines.
The main reason why these African funds are attracted to dollar-pegged markets such as the UAE is a hedge against domestic currency volatility.