DUBAI, United Arab Emirates – The team at genuine Dubai real estate company Mira Estate has a lot to celebrate.
The luxury real estate company just recorded 100% year-on-year growth in sales to buyers from Russia and other ex-Soviet states in the first half of 2022.
Real estate sales to those nationals of the firm, which specializes in Russian-speaking clients, doubled year-over-year to Dh2 billion, or $500 million, according to a company press this week.
In May, at a chic Dubai nightclub, Russian real estate agents from a brokerage agency uncorked bottles of champagne to celebrate the achievement of record commissions for sales to fellow citizens who bought their first home in the desert oasis. months, according to his colleague, who spoke to CNBC anonymously in light of work restrictions.
And billionaire oligarch Roman Abramovich, former owner of Chelsea football club and longtime partner of Russian President Vladimir Putin, is looking for a home in Dubai’s Palm Jumeirah, the iconic synthetic archipelago of synthetic islands designed to look like a palm tree. The tycoon’s personal jet, valued at $350 million, has been grounded in the emirate for about 4 months after the U. S. Department of Justice reportedly grounded the tycoon’s . . . The U. S. Department of Homeland Security will legalize its seizure.
The influx of buyers from Russia, such as the Commonwealth of Independent States (CIS), an organization of nine ex-Soviet countries stretching across Eastern Europe, the Caucasus and Central Asia, has hit the UAE’s real estate sector following Russia’s invasion of Ukraine. and upcoming Western sanctions.
While many countries have imposed sanctions and asset seizures on wealthy Russians and Putin-linked figures, causing many to lose their multibillion-dollar homes in cities like London and Paris, the UAE has remained open for business.
“The war in Ukraine and the effect of sanctions on other Russian-speaking people and their institutions have led wealthy CIS investors to flee their country and seek a safe haven in Dubai,” Mira Estate CEO Tamara Getigezheva said in her company’s statement.
“CIS billionaires and traders have flocked to the UAE in record numbers, which has led to an increase in demand for real estate. Most homebuyers are looking for manufactured homes and beachfront properties. “
In fact, Dubai is experiencing its genuine real estate market in years, with sales in the sector up 45% year-on-year in April and 51% in May, according to the Dubai Land Department.
After a sharp drop at the beginning of the pandemic, the UAE’s luxury shopping mall has noticed a stable recovery after taking a more relaxed approach to the Covid-19 pandemic, as other markets were still applying strong restrictions. The UAE has opened up new visa opportunities for long-term citizens and remote workers, signed a historic normalization agreement with Israel, liberalized some of its social rules and moved from its Islamic weekend from Friday to Saturday to Saturday and Sunday.
But the decision to remain impartial as much of the rich world closed its doors to Russians after Putin’s brutal invasion of its neighbor last February paid off especially for the United Arab Emirates, whose 90 percent expat population, tax haven prestige and reputation for financial secrecy. make it very horny to many other rich people around the world.
Dubai brokerage corporation Betterhomes, in a rating published in April, found that Russians rose two points to the fifth-largest house customer in Dubai in the first quarter. And London-based citizenship-by-investment firm Henley
Russia, meanwhile, is expected to lose 15,000 millionaires to the company’s investigation.
“Roots in the UAE are now becoming a must-have asset in the portfolio of any wealthy investor,” wrote Philippe Amarante, managing partner at Henley.
Misha Glenny, a journalist and the ebook “McMafia,” wrote in an article for Henley
“Wealthy Russians looking to escape devastating Western sanctions on their country have begun moving to the UAE and Israel,” Glenny added, with Glenny fourth on the company’s destination list.
There is also a clear trend in terms of the type of homes that Russian buyers are looking for, say those who paint in the sector.
“Mostly luxury homes, especially around the sea,” Tahir Majithia, managing spouse of Dubai-based Prime Capital Genuine Estate, told CNBC. He named coveted spaces like Palm Jumeirah, as well as luxury homes Emaar Beachfront and La Mer along the city’s waterfront.
“Anything near the water with a smart view, it’s their first preference. “
Buyers are looking for a mix of homes to own and rent as investments, as well as for non-public use, most of which are for investment, Majithia said. “Block agreements, in which a client will buy an entire piece of land or several, are very common. A piece of land from a luxury apartment building will charge between $7 million and $10 million on average, he said, this of course varies depending on location and size.
Russians have been among the 10 most sensible nationalities to invest in real estate in Dubai, Majithia said. their assets in other countries and moving the budget of some here. “
Many Russian buyers are also making their purchases in cryptocurrencies, he said, as several of Dubai’s major real estate corporations accept virtual currency bills.
Anti-corruption activists and lawmakers accuse Dubai of being a center of grimyarray. Kremlin critic Bill Browder called for the emirate to be blacklisted financially, and an organization of members of the European Parliament in May accused the UAE of facilitating “large-scale laundering. “asking him to sanction the Russian oligarchs who moved there.
The Financial Action Task Force, an intergovernmental anti-money laundering watchdog, placed the UAE on its “grey list” in March over fears the Gulf country has “strategic gaps” to stop illegal monetary activities.
In response, the UAE’s framework tasked with combating illegal monetary activities told CNBC that the UAE “has established a strict framework to fight illicit financing and apply targeted monetary sanctions. Effective measures focus on a variety of dangers and typologies of monetary crimes, adding up in the real estate sector. “
Several government ministries have “defined the express regulatory needs that the sector will need to meet to combat money laundering and terrorist financing and ensure that applicable local and foreign sanctions regimes are implemented,” according to a statement from the UAE Executive. Office of Anti-Money Laundering. Money Laundering/Combating the Financing of Terrorism read.
The country aims to provide a sound trading environment for investors from around the world, he said, “while mitigating the dangers of illicit monetary flows entering the country and protecting the integrity of the monetary system. “
The measures come as the country steps up its reforms in an effort to meet standards.
Meanwhile, the UAE is booming.
“I’m sure many Russians seek to solve their problems and problems, but Dubai will eventually profit from any crisis,” Emirati real estate tycoon Hussain Sajwani told CNBC in an interview in mid-March.
“I’ll be fair to you, those sanctions. . . made a lot of other people nervous,” Sajwani said at the time. “If you bring cash through the banking formula here legally and professionally, we will do business with them. “”
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