Dubai’s red-hot real estate sector continues to lure investors — this time through a rare public listing. Dubai Holding’s $584 million residential REIT jumped nearly 14% in its trading debut, underscoring investor appetite for exposure to the emirate’s property market.
With home prices up nearly 70% over the past four years, traditional entry points are increasingly out of reach. Dubai Holding — controlled by the emirate’s ruler — is among those looking to broaden access. In addition to Dubai Residential REIT, it plans to list a separate portfolio of malls and other commercial assets. These moves could breathe new life into the REIT market, which has a troubled history in the United Arab Emirates.
Others, including construction firms and online property portals, are also eying new share sales to capitalize on the property boom.
Meanwhile, fractional ownership models are gaining traction. Stake, a Dubai-based startup, allows individuals to invest with as little as $136. The Dubai Land Department recently launched a platform offering tokenized property shares starting at just under $550.
And demand for housing shows no signs of slowing, with the city welcoming 1,000 new residents a day in the first quarter, according to real estate consultancy Valustrat.
International players are taking note. Brookfield has partnered with Abu Dhabi’s Lunate on a $1 billion venture to invest in residential real estate. China’s state-owned Citic is helping finance a $6 billion project by Dubai’s MAG Group, while Goldman Sachs and Asia-focused Hillhouse Investment have committed millions.
To be sure, analysts have warned that lower oil prices, continued tariff uncertainty and a wave of new supply could temper gains. Fitch Ratings forecasts a “moderate correction” in late 2025 into 2026, as around 120,000 units — nearly four times the 2024 level — are slated for handover next year.
“Investors were naturally interested in the long-term outlook for real estate in the region, given how strong the market has been over the past few years,” said Pradyut Pratap, co-head of Middle East and North Africa investment banking at Morgan Stanley, which helped arrange the Dubai Residential REIT. The listing attracted blue-chip hedge funds, long-only managers and real estate specialists, he told Bloomberg News.
The REIT’s strong market reception is especially notable given the broader regional context.
Saudi Arabia’s United Carton Industries, which raised $160 million in a heavily oversubscribed IPO, had a muted debut. Days later, the company reported a drop in net profit, sending shares further below the offer price.
Valuation concerns likely played a part, but Saudi market jitters haven’t helped. The kingdom’s stocks were the worst performers globally in May, amid weaker oil prices and fears of slower spending on mega-projects.
Still, the region’s dynamics make it a "compelling destination for capital" and better equipped than most to withstand current market headwinds, according to Khaled Hobballah, senior country officer for MENA and head of global markets for MENA and Turkey at JPMorgan. Speaking to Bloomberg TV’s Joumanna Bercetche about the IPO pipeline, he said, “For the right transaction, there will be robust demand.”
For now, while recent Saudi IPOs have generally outperformed their UAE peers, the REIT’s strong showing suggests sentiment may be shifting — at least toward names tied to Dubai’s property boom.
No comments:
Post a Comment