DUBAI - Dubai could have a new real estate law by the end of the year, according to a senior officer at government-owned developer Dubai Properties.
Haiyan Mujarjech says the law, designed to encourage greater foreign investment in the emirate, has been drafted and is being considered by legal and real estate experts locally before it is issued later this month.
Dubai is in the midst of a development boom that is largely supported by private capital. Institutional investment has been slow to develop because of a lack of internationally accepted standards with regard to the nature of ownership.
Mujarjech says, “Investment funds are going to be the next big boom, but Dubai recognises that there needs to be clarity. International investors need paperwork and documentation that conforms to their idea of freehold title.”
In Dubai and Abu Dhabi, investors are throwing money at residential and office developments. And the region has made great strides in liberalising Sharia guidelines on permissible investments.
Bahrain was one of the first Gulf States to establish a trust law. The prospect of the Middle East now opening up to foreign institutions has encouraged Morgan Stanley to set up in Dubai as its base for the region.
Rich Stockton, Executive Director of the group’s investment banking business says, “If we look at a chart of the global real estate market of $14trn, the Middle East doesn’t even figure.” Morgan Stanley expects that to change quickly. Stockton suggests in the short term, “there is a market in indirect private equity that is poised to grow”.