New Moves to Cement Dubai as a Development Destination
You may have seen the commercial real estate (CRE) developments issuing from Dubai recently: According to the Emirates News Agency, vice president and prime minister of the UAE Sheikh Mohammed bin Rashid Al-Maktoum has promulgated a new law in July aimed at driving real estate investment in Dubai, through private-public partnerships.
The decree regulates what are called “musataha” rights as applied to commercial land in Dubai, and will ostensibly allow investors to develop third-party land for mid-term projects. ArabNews.com reports: Musataha agreements, according to the new law, allow investors to construct, mortgage, lease, sell and buy on a plot of land belonging to a third party for a term of up to 35 years”.
Additionally, Musataha contracts allow for extensions of up to 50 years, but two years before expiration, a renewal request must be made.
Reporting from Gulf News also includes how a further royal decree is incentivising qualifying property funds looking to invest directly into the local sector. Such funds would have to “invest Dh50 million or above on the properties to qualify for the incentives”. That’s around $13 million USD at the exchange rate in late July.
To manage this, the article continues, a “Register of Property Investment Funds will be established at the Dubai Land Department under the Decree, which also lists the terms, conditions, and procedures for listing in the Register”.
The timing, they argue, is apt with CRE in the region seeing “revived deal-making” with ecommerce being singled out as driving demand.
Arabian Business reports that the law “forms part of the emirate’s effort to consolidate its status as a preferred global real estate investment destination”. The changes of course require developers to comply with local regulation and law, so consulting with local experts is always our top advice.