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Survey reveals UAE investors favour real estate IPOs

The survey found that 51% of participants preferred IPOs in the real estate sector, followed by technology at 41% and healthcare at 33%

According to Edelman Smithfield’s UAE Investor Pulse Survey, real estate initial public offerings (IPOs) are highly sought-after investments in the UAE.

The survey found that 51% of participants preferred IPOs in the real estate sector, followed by technology at 41% and healthcare at 33%.

The survey also indicated a strong investor interest in UAE IPOs for 2024, with 84% of respondents expressing a willingness to invest in future listings, surpassing the level of interest seen in 2023 and 2022.

Moreover, 71% of investors have confidence in the UAE’s bookbuilding process, indicating high satisfaction and trust in its transparency and effectiveness. Despite the global economy’s slower growth rate in 2023 due to high interest rates, inflation, and geopolitical tensions, the UAE’s resilience led to favourable IPO market conditions. In 2023, the UAE contributed 58% of the total IPO proceeds in the GCC.

The survey is based on feedback from investors in the UAE. It was conducted between February 12 and 19, 2024.

Participants in the survey include chief investment officers, portfolio managers, and buy-side analysts. At least 50% of them work for investment firms managing assets worth $50 billion or more.

Meanwhile, according to the most recent research by Bayut, apartments in Dubai Investments Park, Discovery Gardens, and Liwan provide the greatest rental returns, up to 11%, to buyers of reasonably priced real estate.

Offering up to 10% return on investment (RoI) based on anticipated rental yields for apartments; Dubai Sports City, Dubai Silicon Oasis, and Motor City have become very desirable options.

According to Bayut’s first-quarter analyst, rental returns of more than 8% were achieved by Green Community, Al Sufouh, and Damac Hills, outpacing benchmarks set by most international markets.

The rental yields in all these areas of Dubai are significantly higher than those in major cities like Mumbai, Hong Kong, London, New York, and others, where rental returns typically range from 4% to 7%.

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