Dubai’s property market could see a “cooldown,” one of the UAE’s largest developers has said, as he insisted “smart capital” would keep investing despite Iranian missile strikes.
Mohamed Alabbar, founder of Emaar Properties, the company behind the Burj Khalifa skyscraper, told CNBC’s Dan Murphy that “there could be a bit of a cooldown, but I really don’t see it,” adding that the UAE’s real-estate business is “not built on bank borrowing.”
“Bank borrowing is really restricted in this market. Consumer confidence will be shaken a little bit, but as I said, the policies of this country bring the confidence back so fast,” he said on Thursday.
He was speaking on the sixth day of an escalating war in the Middle East, in which the UAE has been hit with retaliatory strikes from Iran after the U.S. and Israel launched strikes against Tehran on Saturday.
Countries have repatriated their citizens. Dubai’s airport, one of the busiest in the world, was hit, disrupting flights, as were hotels and ports around the country.
“I was surprised, and I was shocked,” Alabbar said of the strikes. “But people with true capital understand that a country like this, with stable leadership and the safety it has shown, can deliver. They will double down on this.”
He insisted that life was gradually returning to normal, adding that footfall at Dubai Mall has already rebounded to 190,000 visitors daily, compared to a typical pre-war daily footfall of 250,000.
“The number of customers that come to our restaurants, our numbers are close to about 80, 85%, and it has been only four days, five days,” Alabbar said. Dubai Mall is owned by Emaar Properties and is next to the Burj Khalifa. “Life is coming back to normality,” he added.
When asked why Iran chose to target the UAE, Alabbar said: “This is the global business hub… what prosperity should be, what positivity should be, is this place.”
“So I think it’s only natural that… people who have no respect for progress, no respect for good quality of life, they probably feel that this is one of their targets. But thank God, that won’t happen,” b
Iran Foreign Minister Abbas Araghchi had reportedly said that the strikes are “not targeting our brothers or neighbours in the Persian Gulf. But we are targeting U.S. targets.”
However, other experts told CNBC that the wealthy were leaving Dubai.
Dale Buckner, CEO of security firm Global Guardian and a former Green Beret, told CNBC that by Tuesday morning, the firm had seven corporate clients, including large finance and consulting firms, looking to evacuate 1,000 to 3,000 employees.
“This looks very much like Ukraine,” he said.
“The U.S.-Israel war on Iran is upending that crucial aura of security in Dubai,” said Jim Krane, a fellow at Rice University’s Baker Institute, told CNBC this week.
“Dubai’s economic model is based on expatriate residents providing the brains, brawn and investment capital. You need stability and security to bring in smart foreigners,” Krane added.
But Ameerh Naran, CEO of Vimana Private Jet, told CNBC that Dubai residents who are leaving are travelling for business meetings, not fleeing to safety.
“They don’t feel unsafe,” he said. “It’s pretty much life as normal was just a bit of extra noise in the background with all these missiles. But life has to go on. They need to travel.”