Here’s why Saudis are investing in UAE’s property market

UAE-listed and private developers are expecting a surge in investor numbers from Saudi Arabia over time, thanks to the emirate's well-regulated market, safe-haven reputation and high commercial returns.

"Saudis are the biggest investors after UAE nationals and hold between 15 and 20 percent of our total project portfolio," Ali Hamdoon, director of marketing and sales, RAK Properties, told Argaam on the sidelines of Cityscape Global.

“We offer them a luxurious lifestyle, along with a regulated and secure market. That's why Saudis come and invest in the UAE," he noted.

Although majority of its buyers are long-term investors, Hamdoon said bulk buyers do look for a higher return on investment.

The current market benchmark stands at 8 to 10 percent, he added.

Maan Al Awlaqi, executive director - commercial, Aldar Properties, admitted that Saudis were driven to Aldar projects due to their successful destination-led strategy.

The Abu Dhabi-listed developer’s destinations include Yas Island and Saadiyat Island, which house theme parks, schools, museums and universities.

"So that sort of destinations tend to attract Saudis and their families where they can go to and have a lot of fun,” he added.

Al Awlaqi also revealed that Saudis have been investing a lot in smaller apartments, driven by higher yields.

Meanwhile, Farhad Azizi, CEO, Azizi Developments, said that they are witnessing an increase in Saudi buyers, who currently make 22 percent of its GCC investor base.

“Saudi investors are preferring smaller apartments," he said, adding end-users preferred larger apartments in upscale projects such as Palm Jumeirah.

- Entering Saudi Arabia

Given the business-friendly regulations in Saudi Arabia, developers such as RAK Properties and Azizi are planning to enter the Kingdom’s realty market in the coming years.

“We are looking into opportunities as they [government] are making it easy for businesses. We are doing a lot of surveying of the market now and are open for joint ventures,” Azizi said. The developer plans to enter the market in 2021.

Hamdoon ruled out any plans to venture into the Kingdom next year, stating “we may look at entering in 2021”.