Dubai opens new property to foreigners

Two plots of land have been released for foreign buyers in Dubai Investments Park on a leasehold basis for up to 85 years, Sheikh Mohammed bin Rashid, Vice President of the UAE and Ruler of Dubai, revealed yesterday on his website. It is unclear whether the areas of the land are intended for residential, commercial or industrial development. Dubai Investments Park is a mixed-use development, which has a strong focus on industrial sector but also has the Green Community residential development. There are many areas in Dubai where expatriates can buy property on a freehold basis, including Dubai Marina and Jumeirah Beach Residence. Gaurav Shivpuri, the head of capital markets at Jones Lang LaSalle, Middle East and North Africa, believes the land is likely to be used for industrial development. He said there were areas in Dubai, including Dubai Investments Park, which offered leases that were relatively short. An 85-year lease would provide more security for investors, he said. "This is going to facilitate people to invest in industrial zones," he added. "Or at least it will create an opportunity from a legal and ownership point of view. Investors can be confident that they are going in for 85-odd years. The investor is protected." Mr Shivpuri said this would be something new for the market. He added he believed the 85-year lease only made sense if it was for industrial usage, rather than commercial or residential development. "You have specific areas where people technically own their property freehold," he said. "Industrial areas in every city are always ground leases because typically cities grow … and then they can be reconverted and new industrial areas are offered to investors." In terms of the residential market, property brokers said more clarity was needed for foreign investors regarding the laws in order to attract more expats to invest in the property market if more land was being opened up to investors. "If there is more clarity on ownership and regulation, then investments could increase," said Jonathan Yohanan, the senior manager of investors at Expat Properties. But the fundamentals were there, he added. "Dubai has got the infrastructure in place," he said. "It's just a matter of the supply and demand that need to be met and once that is met, Dubai is ready to take off to the next level again." Others also pointed to a lack of clarity in yesterday's statement. "It doesn't specifically say that it's industrial land," said Edward Batten, a commercial leasing manager at Knight Frank. "It's unclear to date. If this is on industrial and logistics it is a big thing for the property market. It will be the first time such a long lease has been granted in the emirate of Dubai."from the national.