Norwegians Rank as the Second Largest Purchasers of Commercial Real Estate in Dubai

According to data from a real estate company, Norwegians ranked as the second largest buyers of commercial real estate in Dubai during the second quarter of 2023, following Indians. The top five buyer nationalities included the UK, France, and Russia.

CRC, which is linked to Betterhomes, reported that two Norwegian investors purchased multiple units, making them the second largest commercial buyers according to the agency's records. Specific details about these acquisitions were not disclosed. The presence of Norwegian buyers in the commercial real estate market in Dubai increased in the second quarter, contrasting with the first quarter of 2023, when Indians held the top spot, followed by Canadians, Azerbaijanis, the British, and Lebanese buyers.

In 2022, Indians held the top spot for the entire year, accounting for 27% of buyers. The UK ranked second, followed by investors from Jordan, Russia, and Portugal.

Norway, a country with a population of 5.4 million, boasts a substantial sovereign wealth fund valued at $1.4 trillion, making it one of the world's largest investors. In terms of GDP per capita, Norway is ranked 11th globally, with Qatar in the first place and the UAE and Kuwait both in the top 10. In 2022, Norway exported goods worth $395.79 million to the UAE.

Shifting to Dubai's real estate market performance, the second quarter of 2023 saw a significant increase in office sales transactions, with a 49% year-on-year rise and a 32% increase in value to 1.154 billion dirhams ($314 million). Business Bay had the highest number of office sales transactions, followed by Jumeirah Lakes Towers and Jumeirah Village Circle. As for the retail sector, Mohammed bin Rashid City had the highest number of property sales, followed by International City, and Jumeirah Village Circle.

Overall, Dubai's commercial real estate market witnessed a 22% increase in sales transactions and a 101% rise in total transaction value compared to the previous year, reaching AED 21.385 billion.

Of CRC's commercial real estate buyers, 96% were end users, while investors made up the remaining 4%. The realtor noticed a 12% decline in commercial leasing transactions, which they attributed to an increasing preference among business owners for buying rather than renting, signaling growing confidence in Dubai's long-term prospects after the uncertainties of the Covid-19 era.

Despite the introduction of the UAE's corporate tax, which became effective recently, the country's tax rate remains the second lowest in the GCC after Bahrain. As a result, the impact of the tax introduction on business growth or foreign direct investment (FDI) is not expected to be adverse.

In conclusion, Dubai's real estate market experienced notable increases in transaction volumes and values for office sales, but commercial leasing transactions declined. Nevertheless, top office communities continued to attract tenant interest, and lease listings remained active, indicating positive market dynamics.