Dubai’s new real estate funds law. What benefits does it bring for the investors? Let’s find out.
Introducing the new law to support the growth of real estate investments might attract new capital to the real estate industry. Experts say it might be too early to conclude whether it will benefit real estate investors and whether or not it will encourage their property investment in Dubai.
This law was enacted on July 19 to promote Dubai’s growth of real estate investment funds by Dubai’s ruler Sheikh Mohammed bin Rashid Al-Maktoum.
As per WAM, a report by Emirates Media Agency, the law provides some privileges to real estate investment funds to make U.A.E. a global destination for investment in real estate.
Also, according to Al-Bayari, this new law will also make Dubai’s private development and free zones much better.
Because of this, high-net-worth individuals are swarming to Dubai, opening up many new places for personal and professional relocation.
Since more education is required on the advantages of investing in real estate and real estate investment funds, it may not directly benefit the typical real estate investors. According to Phoneix, real estate investors are currently attracted to smaller real estate crowdfunding along with fractional ownership platforms.
A real estate investment fund is also a type of investment fund Investopedia says that a real estate investment fund invests in public property companies’ securities. Real estate investment funds can also be taken care of both actively and passively, just like typical mutual funds are managed. Investment funds give value through appreciation.
The real estate funds that are private are managed professionally for investing in properties directly. Only accredited, high-net-worth investors have access to these, and they also need a significant amount of minimum investment.
This new law provides a lot of incentives to bring in international real estate funds and increase investments in various property projects, as per nationalnews.com.
The property sector has been the most and also is the most crucial sector in Dubai and is also recently performing great. Many foreign investors have started showing much interest in property investment in Dubai, as per per Nitish Khosla the founder of Phoneix. Also, according to him, the property sector of Dubai attracted new foreign investment of more than $27 billion in 2021. There can also be more interest from foreign investors because of this new real estate fund law brought by the Dubai government.
According to the real estate investors, this new real estate law will promote real estate funds and institutional investors to encourage regulation and transparency further once they enter the market.
According to this law, a register must be called the Real Estate Investment Funds Register at the Land Department of Dubai. Funds can be added to this register. But the value of these real estate asset investors should be at least Dh180 million ($49m). Also, not to forget when applying, these funds shouldn’t be under suspension from trading on the Dubai Financial Market.
As per the new law, the property value of the funds invested should not be less than Dh50m, and the properties should also be listed as commercial properties.
The real estate fund law came to take foreign and high-scale investment at an even better position than it is currently. Its main idea is to keep Dubai at the top of the game in real estate investments. The benefits offered under this law will push Dubai’s Real Estate market even further, thus making it flourish.
