Other BriefingsRussian Investors Developing ‘Little Moscow’ in Dubai
Russian investors in Dubai are working to become real estate developers or acquire clusters of homes to build “Little Moscow” communities in the Emirate. Buyers from Russia have become big investors in Dubai property since sanctions imposed on Moscow locked them out of European and North American markets.
The UAE has also become a key destination for Russian tourists and investors since the Ukraine conflict began in February 2022.
Aleksandr Timofeev, off-plan client manager at Betterhomes, told AGBI he had seen a “noticeable surge” in interest from Russian investors seeking plots of land to construct lavish villas or mansions.
He said Russian clients were particularly drawn to exclusive locations such as Emirates Hills, Dubai Hills and Palm Jumeirah, “where they can enjoy privacy and luxury within affluent neighbourhoods”. Average plot prices in these districts are around AED50 million (US$13.6 million), according to Timofeev.
He added: “There has also been an influx of affluent Russians with expertise in the construction industry. Many of them are keen on developing distinctive residential buildings and hotels, [and] raising the bar for construction quality in Dubai. Some investors are opting for a strategy of acquiring multiple townhouses and villas, renovating them and subsequently selling them for profit.”
Residential property prices in the emirate rose at their fastest rate in almost a decade in the first half of 2023, climbing 16.9% year on year. Villas topped previous records set in 2014.
Betterhomes in July reported that, in the second quarter of this year, Russians were third place in the list of largest buyers in Dubai by nationality, behind Indians and British nationals.
Nick Maclean, managing director of property consultancy CBRE Mena, told AGBI this week that some research suggests Russians have now become the single largest nationality. “I would expect some to enter the development market, subject to them being able to continue to export their capital from Russia. The nationality restriction on ownership in some areas will mean that they are likely to want to partner with Emirati investors as well.”
Akshay Jayaprakasan, an associate partner at research company Redseer Consulting, told AGBI in July that Russians were more likely than other investors to buy instead of renting. Their average spend on a property is nearly double that of other nationalities, at US$1.1 million.
Source: Zawya
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Dezan Shira & Associates assist foreign and Russian investors into Dubai and can assist with structuring property holdings and advise on the tax position. For assistance please contact Maria Kotova at dubai@dezshira.com
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