What’s at Stake this week? | May 19, 2024

British investors are taking Dubai’s property market by storm, with transactions increasing 43% in Q1 2024 compared to the previous year and 27% over the last 12 months. They now account for 21.2% of the market, surpassing Indians and Russians, per a recent Allsopp & Allsopp report. This increased appetite is fueled by Dubai’s tax-free living, high rental yields, and luxury lifestyle. Additionally, Dubai offers higher rental yields and a more stable investment environment than major UK cities, making it an attractive option for British buyers seeking long-term growth and residency benefits through the Golden Visa scheme.

📈Emerging Market Trends

How Dubai became the capital of fintech

The financial technology sector in Dubai has experienced a meteoric rise, transforming from a nascent industry to a fintech hub within a few short years.

Why is Dubai rapidly becoming the capital of fintech?

Under the Economic Agenda D33, the city aims to elevate its status to that of the top global financial centers by 2033, highlighting its well-founded ambition to become the ‘Fintech Capital’. And Dubai is not skimping on its execution plan.

Zooming in:

Rapid adoption and growth

• The total fintech funding in the MENA region reached $2.5 billion in 2023 alone, with a significant portion concentrated in the UAE

• The region recorded fintech investments reaching $819 million in just the first half of 2022
• Live example: Mastercard’s Borderless Payments Report 2021/2022 highlighted that over half (51%) of UAE residents making online cross-border payments believed these were crucial for the recipients’ financial survival (The FinTech Times)

Two things to note here: Substantial fintech investments in the UAE signal strong market confidence and innovation potential. Additionally, widespread adoption of fintech solutions highlights their vital role in enhancing the region’s economic resilience and technological empowerment.

Influx of high-net-worth individuals (HNWI)

As of the latest reports, Dubai is home to 72,500 millionaires, marking it the wealthiest city in the Middle East. This influx encourages the enhancement of its fintech ecosystem by increasing demand for sophisticated financial services and investment opportunities that meet the needs of a diverse, tech-savvy population (Henley & Partners). 

Friendliness of conducting business

The Dubai International Financial Centre (DIFC) offers a conducive ecosystem with its independent judicial system and global financial exchange, aligning with international best practices (The FinTech Times). This environment has led to the rise of significant fintech players like Tabby, Wio Bank, and Stake, and has attracted over 600 fintech startups within DIFC alone. 

Did you know? The broader fintech scene in Dubai has also seen a substantial increase, with a 31% jump to 902 companies in 2023.

Nevertheless, the introduction of the UAE’s Golden Visa, offering long-term residency to entrepreneurs, investors, and HNWIs, cements Dubai’s role as a hub for global fintech talent (The FinTech Times). This is especially notable as Stake has become the first fintech company to introduce a fully digitized Golden Visa process, streamlining talent attraction efficiently and hassle-free.

Bottom line? Dubai’s strategic initiatives and welcoming business environment have made it a leading fintech hub. With a growing number of HNWIs and a robust startup ecosystem, what’s clear is that: Continuing on this trajectory, Dubai is set to become not only MEASA’s fintech leader but also a dominant global force.

Read more:

https://blog.getstake.com/2024/05/15/how-dubai-is-on-its-way-to-becoming-the-global-fintech-capital/ 

📊Strategize With Stake

Dh80 million penthouse sale sets new record in Downtown Dubai

This week, Dubai’s property market hit a new high with the sale of its most expensive apartment in Downtown for Dh80 million. The luxurious four-bedroom penthouse at Kempinski The Boulevard features five bathrooms and two Fendi-designed kitchens.

This landmark transaction, which surpasses the previous record of Dh73 million for a Burj Khalifa apartment in 2022, illustrates Dubai’s unparalleled appeal as a premier destination for ultra-luxury real estate. 

Why is that? This Sky Collection Penthouse features breathtaking, unobstructed views of the Burj Khalifa and epitomizes the pinnacle of luxury living. It’s sold for Dh10,715 per square foot which is four times the average price for downtown apartments this quarter and commands a 60% higher price than other branded residences in the area.

In light of recent market achievements, Stake is thrilled to announce that in October 2022, 484 investors came together to fund a 1-bedroom unit in Kempinski The Boulevard for Dh2.7 million. Just 18 months later, this property has appreciated by 11%, reaching a current valuation of Dh3 million.

This means two things:

• Strategic acquisition: Our real estate team’s diligent efforts to secure the right properties have proven effective. Our strategy is centered on thorough research and careful selection to ensure that our investments meet market demands and provide excellent value to our investors in the future. 

• Long-term value: In real estate, while the location is crucial, the holding period is equally vital. Although an 11% increase is a positive start, the Stake team believes that as the investment opportunity matures, this property will show even greater promise and returns. Kempenski The Boulevard is set to appreciate in value as plots around Downtown Dubai become increasingly saturated and demand for this type of property rises. This is why real estate investments are meant for the long haul.

Bottom line? Dubai’s dynamic property market continues to offer lucrative opportunities for those looking to invest in real estate. With careful selection criteria and a strategic holding period, investments in premium locations like Downtown Dubai can yield substantial long-term gains.