With the ease of entry in the Dubai real estate market, many leading US developers and institutional investors are investing in Dubai.  Turner International, The John Buck Co., Hines, The Carlyle Group and Blackrock are just some of the big names expressing great attention to the Emirate.  The Trump Organization is also actively building and recently broke ground on the Palm Trump International Hotel & Tower, selling its residential portion for over $3,000 per square foot!  Meanwhile, average rent for class A office space has risen to about $88 per square foot.  With labor costs low and rents high along with economic stability and appreciating property values make Dubai a great place to invest. 

Yet, there also may be downside to investing in foreign countries where potential investors must exercise caution and due diligence.  The area seems to be overbuilding drastically and there seems to be no concept of the latter in supply and demand at this point.  It seems like it’s all speculative building at a large scale.  Further, overseas investors are restricted to purchasing only in designed areas, such as the Dubai International Financial Centre and Jebel Ali Free Zone, thus inflating the values of those areas perhaps leading to a great price difference in land cost for local versus international investors.

Yet, the investment doesn’t just go one way.  Middle Eastern investors and sovereign wealth funds are finding riches in the US property market.  Even as oil continues to plunge in price, these funds still hold coffers of cash, allowing them to invest in trophy real estate in the US.

Most notably, the Abu Dhabi Investment Council, the sovereign wealth fund of the Abu Dhabi emirate, purchased 90 percent of the Chrysler Building in New York City for a reported $800 million.  Around the same time, Meraas Capital LLC, in a joint venture, paid $2.8 billion for the General Motors Building, also in the Big Apple.

In addition, many wealth funds from the Middle East have been investing outside of the United States.  Oman, for example, recently bought a 50 percent stake in the UK-hotel chain, Jurys Inns.  Dubai broke ground on its own turf with its Universal Studios portion of Dubai Land, a futuristic theme park valued at over $64 billion.

For more information about investing in real estate, I would consult a professional who specializes in the market and market segment and remember it is important to perform due diligence.