UAE REAL ESTATE ASSETS TO ACCELERATE FROM DH2.5 TRILLION DUE TO HIGH DEMAND

The value of real estate assets in the UAE has exceeded $680 billion (Dh2.5 trillion), according to a top official, which is expected to grow fast in the coming years due to higher demand and fueled in part by the current US-China trade war.

“The UAE real estate market comprises almost US$680 billion worth of assets today which is expected to grow further at a fast pace,” Amit Goenka, Chairman and MD of Nisus Finance, told Khaleej Times in an interview. “With beneficial US tariffs for GCC nations compared to China and other Asian countries, we anticipate some shift in manufacturing, 3PL logistics, light assemblies, and services to the GCC region with Dubai acting as the epicenter for human capital. UAE is in a unique position to benefit from this paradigm.

“The relocation of business to the UAE, fueled by manufacturing, logistics, technology, and finance will continue to attract a lot of talent – blue collar workers to executives with their families – which will increase the demand for housing. The UAE’s ecosystem of high-quality lifestyle, healthcare, safety, and attractive tax regime has been a significant driver of capital, people, and businesses. This is likely to keep the real estate market buoyant for a longer period.”

Over the last four years, land and property transactions have been growing at an exponential rate, from Dh300 billion in 2021 to Dh528 billion in 2022 to Dh634 billion in 2023. Last year, the total value of property transactions reached Dh761 billion ($207 billion).

“The Compound Annual Growth Rate (CAGR) in the sector is over 30 percent which means we’re looking at adding another US$60 to US$70 billion of additional sales in this year from $205 billion last year. So, we are talking about sales reaching $270 to $280 billion this year,” he said.

The UAE’s real estate sector is going to see an influx of global private capital, institutional capital, and international family offices and funds as the market matures. With strong regulatory environment that supports international capital to benefit from the opportunities, capital from all over the world is entering the UAE market to fix the widening real state funding gap of US$100 billion. There is also a growing shift towards digitisation with cryptocurrency, tokenisation, virtual assets, crowdfunding, fractional ownership, among others.

Nisus Finance is a leading finance company engaged in bringing global capital to fuel the growth of Dubai’s real estate. It specialises in urban infrastructure finance and private capital market transactions.

“The real estate financing requirement is likely to grow from US$100 billion to US$130-140 billion this year. We are looking at a select opportunity set within this; which is why — when I say our target is eventually US$5 billion, we are starting with the first US$ 1 billion fund — I think that is where we will be, as far as the immediate opportunities are concerned,” he says.

If housing demand continues to jump the same way as the last few years, the UAE real estate sector will need to address an even larger funding gap. “We see that the total amount of funding required each year to continue at this pace of growth, which can only be partly met by institutional capital. The balance obviously comes from equity and off-plan sales,” Amit Goenka says.

“Of the current estimated funding gap of say $100 billion—which is only widening with time, about US$30 billion is currently being fulfilled through financial institutions, banks and funds, while the rest of the $70 billion funding gap remains untapped. This is where the opportunity lies. So, the need for private capital, private credit, and private equity to partially fund these developments is critical to continue the current pace of growth.”

“In addition to the standard real estate developments, which are the residential, commercial and retail developments, we see a strong demand in the industrial logistics and warehousing that could absorb another half a billion dollars in investments”.

He noted that the UAE has historically been seen as a trading hub—and not a permanent economy for international investment directly into capital assets.  However, with the extraordinary vision of the Rulers, who have created future ready foundations, we see a paradigm shift. The UAE is now more of a destination for global capital to invest and benefit from the opportunities thanks to its strong regulatory environment, progressive policies, and supportive ecosystem” he says.

“We are currently seeing a trend among the next generation of local families. They are moving away from legacy real estate assets and want to invest into new-age opportunities, including cryptocurrency, virtual assets, tokenisation, and other deep tech opportunities. This means that the legacy asset portfolios will get dismantled or will be sold to global investors including to our DIFC Fund and this money will be recycled into new growth avenues. With effective family office regulations in DIFC and ADGM, the next generation is taking control of family assets.”

The Dubai Land Department (DLD) recently announced a real estate tokenisation pilot project. DLD anticipates that this initiative will drive significant growth in the real estate tokenisation sector, with its market value projected to reach Dh60 billion by 2033, representing 7 percent of Dubai’s total real estate transactions.

“We definitely want to be part of this tokenisation project. Tokenisation or virtual assets are obviously the future asset class including within real estate. I think the global market itself is likely to triple from $16 billion to about $53 billion over the next few years,” he added.

Regulators like Abu Dhabi Global Markets (ADGM) provide a platform for setting up blockchain-based real estate token platforms, including token markets. The infrastructure is there but global participation has to deepen. Crowd funding is also growing rapidly with digitization of real estate title deeds and online registrations.

2025-05-13T18:14:31Z