Dubai: The Burj Khalifa’s record as the world’s tallest building is well known. Not so well known is its connection with India. Indians own the most number of apartments in the building, which has more than 160 stories and a height of over 828 metres. BR Shetty, an Indian industrialist based in the United Arab Emirates (UAE), paid United Arab Emirates dirham (AED) 45 million in 2005 to buy the entire 100th floor. BK Modi, a Singaporebased businessman, Rizwan Sajan, chairman of real estate company Danube Group, and Bollywood actor Shilpa Shetty, to name but three, are other Indians or people of Indian origin who own apartments in Burj Khalifa.
Last year, building materials supplier, Danube Group launched a project to develop 175 townhouses at Al Furjan — a residential hub in Dubai — by 2016. The three- and four-bedroom houses, with a built-up area of 2,500-3,000 square feet, have prices starting at AED 2.5 million (1 AED = Rs 17.01). The entire project was sold out on the very first day. The largest number of buyers was again that of Indians. Indians have long been flocking to the UAE for jobs. They form the largest number of expatriates in the Gulf (in Dubai alone, 30% of the population are Indians). But in recent years, they have also — as the cases of Burj Khalifa and Danube illustrate — been buying property by the hordes in Dubai, one of the seven federates of UAE.
Destination Dubai
Indians now are the largest non-Arab investors in Dubai real estate in terms of value and volumes, according to Dubai Government Land Department (see India Shining). They have invested AED 44 billion in Dubai’s real estate market in the last three years, including AED 18.1 billion in 2014, according to Dubai Land Department data. “Many Indians consider Dubai as their second home. Property prices in Dubai are cheaper than the corresponding places in India or other international cities,” said Rizwan Sajan, chairman of Danube Group. The average price of an apartment in prime locations in Mumbai is Rs 6 crore whereas the corresponding price for a posh apartment or villa in Dubai is AED 2 million to AED 3 million, or Rs 3.4 crore to Rs 5.1 crore.
Even in an upscale location like Dubai Marina, whose expansive waterfront is packed with idling yachts, property prices are cheaper than in many Indian cities. Or, for that matter, London. Properties in London cost three to four times more than in Dubai. It is no wonder then that a number of developers in India such as Sobha Group and Danube are developing prime property in Downtown Dubai and Dubai Studio City.
Most of the buyers are typically Indians. “70% of the investors in our first two projects are working Asian expatriates, especially from India and Pakistan, because they saw a good investment opportunity,” said Sajan. Indians in Dubai, particularly from the middle class, buy property for pretty much the same reason as most people working in places far from home do: it makes sense to own a property than pay rent for one. The rents in Dubai pinch: ranging from AED 80,000 to AED 1,00,000 a year for a one-bedroom apartment in some of the premium properties, rising by up to 8% a year. Buying makes sense: a decent, spacious property in an upscale locality typically costs about AED 1 million.
A recent survey by Bayut.com, an online property portal, showed that the majority of Indians living in Dubai planned to buy an apartment rather than a villa or a townhouse. About 60.8% of Indians surveyed in the study said they have been looking to buy a house for the past three months. Of this lot, 82.86% said they are interested in buying apartments. Only 13.71% of Indians showed an interest in buying villas. The search for townhouses was limited to just 1.71% Indians.
At Burj Khalifa, the buyers are not just the affluent. In fact, the number of investors buying apartments through home loans in the tower had doubled in the first nine months of 2014 compared to the same period in 2013, according to authorities. Even so, the most sought-after localities happen to be the toniest in Dubai — Dubai Marina, Downtown Dubai and Jumeirah Lake Towers. According to Luxhabitat, a Dubai-based real estate brokerage firm, the maximum number of properties above AED 5 million were sold in Downtown Dubai followed by Dubai Marina and Palm Jumeirah.
An Indian businessman in the UAE who owns 27 residences in Burj Khalifa said Indians are investing in the UAE because it is very difficult to invest or do business in India, especially in Kerala. “There are trade union problems, shortage of labour and even restrictions on using land. So instead of attracting trouble by investing in India, we find peace of mind and reasonable return of investments in the UAE,” he said, requesting anonymity
