DUBAI: Real estate developer Dubai Pearl said Monday it had sold property assets worth $1.9 billion to a Hong Kong-based investor, in a sign of increasing Chinese interest in Dubai’s booming property market.
Chow Tai Fook Endowment Industry Investment Development (Group) Ltd., a partner of China’s Civil Affairs Ministry, had bought serviced apartments, high-end residences and two five-star hotels, Dubai Pearl announced in an emailed statement.
The properties are part of the 20 million square foot Dubai Pearl complex, which is now under development and will include a shopping mall and offices as well as residential space. It is due to be completed in 2017.
Originally launched in 2008, the project was slowed for years by Dubai’s real estate market crash of 2008-2010, but is now proceeding as the market recovers, with residential property prices jumping about 20 percent last year.
“I think this is the beginning of a major wave of investment interest for major Chinese and other Asian investors in the Dubai property market,” Victor Chu, chief executive of First Eastern Investment Group, a Hong Kong-based investment firm, told Reuters.
“This is mainly driven by the Chinese investors’ desire for global diversification into markets and sectors where they are welcome and can add value, and Dubai’s property sector neatly falls into this category.”
Consultants Jones Lang LaSalle said in a report last year that Chinese and South Korean investment in the United Arab Emirates’ real estate sector was expected to increase because of growing trade and other business cooperation between the countries.
Last June, China State Construction Engineering Corp, one of the world’s largest construction firms, said it had agreed to invest in a $1 billion resort project in Dubai, its first real estate investment in the Middle East.
CSCEC did not specify how much money its Middle Eastern arm would put into the Viceroy Dubai Palm Jumeirah project, of which it is the main contractor. Developed by SKAI Holdings, a Dubai-based real estate investment firm, that project will include a hotel and furnished residences, and is to be completed in 2016.
Yu Tao, chief executive of CSCEC’s regional arm, said such projects could appeal to the rising number of Chinese individuals interested in real estate and other alternative investments abroad.
Deepak Jain, head of strategic planning at Jones Lang LaSalle in Dubai, said Chinese investment was particularly strong in the emirate’s retail sector and could evolve to include more investment in the hotel and tourism industries.