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Trump's protectionism will benefit UAE property sector: CEO
29 May 2017
Growing protectionist policies in the West will ultimately benefit the United Arab Emirates’ (UAE) real estate sector, despite the challenging economic climate as a result of the low oil price, a Dubai-based developer has said.
Farhad Azizi, CEO of Azizi Developments, said his optimistic outlook for 2017 has been cemented by an increase in demand as a result of barriers and immigration policies being set by the United States (U.S.) and Europe.
Farhad Azizi, CEO of Azizi Developments
“A lot of new governments and new politicians are becoming too protectionist and they’re highlighting borders instead of being more global,” he told Thomson Reuters Projects during an interview last month.
In his first four months in power, U.S. President Donald Trump attempted to ban citizens of six predominantly-Muslim countries from traveling to America. As a presidential candidate, Trump had called for a temporary ban on Muslim immigration to the U.S. and declared in a TV interview that “Islam hates us”.
While tens of thousands of people protested in London against President Trump’s ban on entry to the U.S. by people from the mostly-Muslim nations, many of the 52 percent of Britons who backed Britain exiting the European Union were motivated by concerns about immigration.
The approach is likely to push investors to look at alternate locations, such as Dubai, to reside and invest their money, he said.
“With those rules being brought in those countries, I think what they’ll end up with is a lot of outflow of people and money, especially the people that have the capacity to move,” he added.
“That’s why we’re getting into new projects.”
Azizi Developments signed an agreement in February to partner with the Dubai-based Meydan Group to develop a low-rise residential and retail project within the 40 million square foot Meydan One master plan. The project with Azizi will cover 180 plots near the Meydan One Mall.
“We amalgamated it (180 plots) into 76 plots, and so 76 projects will be built,” Azizi said.
The project will include a mix of high-end and affordable residential properties, as well as some commercial areas and hotels. The majority - around 80 percent – will be residential, which delivers a total of 15,000 homes worth approximately 10 billion UAE dirhams ($2.7 billion) in sale value.
“The master plan is designed. There’s four phases; two of the four contracts for construction have been awarded,” Azizi said. About 1.7 billion UAE dirhams in contracts were signed in April to deliver the first two phases.
“The individual building designs are being worked on. We will be tendering phase three and four probably by the last quarter (of 2017).”
The developer is also launching projects in Dubai Studio City, Dubai Sports City, Downtown Jebel Ali and Dubai Healthcare City.
“We will be developing a lot of the Healthcare City just like we’ve developed Al Furjan,” Azizi said, referring to the master community near Jebel Ali in the south of Dubai.
“Right now we are financing it (projects) ourselves,” he added.
The CEO said sales have been better in Q1 2017 compared to Q1 2016, although he expects things to slow down during Ramadan and the summer period.
“We thought it's going to be the same or worse than 2016 but actually it’s been better.”
The Trump effect
Azizi said Dubai’s expat-friendly and global business-friendly environment, as well as its world-class infrastructure, is a huge draw for investors.
“Because this (Dubai) is like a little Europe or America put together, it’s very comfortable to live here,” he said.
Azizi said that the new demand is not necessarily from current U.S. residents, but from those considering emigrating from Gulf Arab states and neighbouring nations.
“A lot of our clientele has generally been from GCC countries and India and Pakistan,” he said. “The client is not necessarily living in America, maybe he was planning to buy land in Florida, but he says you know what let me just buy it in Dubai.”
Strategic visa agreements also play a role in drawing investors to the emirates, Azizi said, in stark comparison to the tough travel permit processes in the U.S. and Europe.
“Many countries unfortunately are blocking all this (visas),” Azizi said. “They’re making it difficult to get a H1 visa, for example.”
In contrast, the UAE announced last year that it would grant visas on arrival to visitors from China, the world’s second-largest economy. The UAE also announced this year that it would grant entry visas on arrival to Indians holding passports with a U.S visa or a green card. A decree permitting citizens of the Russian Federation to receive visa on arrival was also approved in 2017.
“We were very happy to see they (UAE) has made it visa on arrival for Chinese nationals,” Azizi said.
“It hasn’t had an immediate impact on us but we have more interest now, more enquiries, and agencies and real estate companies in China, who want us to come and present our properties to them so they can sell it to their clients.”
© Zawya Projects News 2017