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A Kazakh developer is planning large-scale housing projects on the Dubai Islands.
The announcements of foreign projects by the largest Kazakh developer BI Group coincided with the record activity of Kazakhstanis in the foreign real estate markets, which brokers have noted this year.
This activity was preceded, and in many ways prepared by the first in-depth acquaintance of Kazakh investors with Dubai and UAE real estate, which was successfully carried out by Dubai Land Department back in 2020. That year the Dubai Promotion Trustee represented by iOleg Lavrik, together with representatives of the leading recently merged developer of the emirate Dubai Holding Мeraas, held a comprehensive meeting with a delegation of BI Group from Kazakhstan headed by Rasul Mustafin, which was initiated by the Kazakh side.
BI Groups plans to spread to Dubai
BI Group is the largest developer in Kazakhstan, which is engaged in various areas of activity, but 60% of the company's activity is construction: BI Group builds about 1.1 - 1.2 million square meters of residential and commercial real estate annually not only in Kazakhstan, but also in Russia (St. Petersburg, BAM) and Uzbekistan.
Then, in 2020, the purpose of visiting Dubai, the largest center for real estate investment in the Middle East, on the part of the delegation was to get acquainted with the most promising investment areas, as well as determine and get impression of the largest development companies in the UAE (Dubai Holding Meraas, Emaar, etc.). As a result, delegates from Kazakhstan were able to get acquainted with the layouts of some of the most popular developer projects and get comprehensive information about them. Over the years since that meeting, BI Group has become even stronger in international markets and, with the help of the Promotion Trustee and the Dubai Land Department, has found the most convenient and profitable options for cooperation, choosing such major companies as Prestige One and Nakheel as partners in the UAE. Together with the first of them, the Kazakh developer will be engaged in the construction and sale of its projects in Dubai. The local company bought the land for the project from the state developer Nakheel and will be engaged in the bulk of apartment sales in the Flora project.
The initial investment for the BI Group project in Dubai is about US$ 65,000. This is the down payment for a one-bedroom apartment of 62 sq. m in one of the more affordable projects: Canal One or Harbour. Investors will need to pay an additional US$ 260,000 over the next two to three years during construction. The Flora project offers larger apartments from 77 sq. m and at higher prices, with a minimum price of US$ 7,300 per sq. m.
Overall, in 2024, BI Group's investment in residential real estate in Dubai will reach US$115 billion. The market is projected to grow to US$170 billion by 2028, opening up ample opportunities for new entrants ready for a highly competitive environment.
Kazakhstani investors go global
But, most importantly, the result of the meeting held almost five years ago was not only the interest of Kazakhstan's largest developer in the opportunities of the UAE real estate market, but also surge in the interest of Kazakhstani investors in the international, and most importantly, Dubai investment projects. According to the international real estate agency Tranio, in the first 10 months of 2024, the number of applications from investors in Kazakhstan increased by 17.8% year-on-year. Interest in foreign real estate from Kazakhstan exceeded even the peak figures of 2021, reaching a six-year high.
Interest in real estate in the UAE among buyers from Kazakhstan has been steadily growing since 2021, peaking last year. However, in 2024, the number of requests decreased (-21.2% year-on-year), as well as the average budget (-13% compared to 2023 and -49% compared to 2022).
Nevertheless, the UAE remains one of the top three investment destinations for Kazakhs. With a share of 12.3% of the total number of applications, the country ranks second in popularity among Kazakhstanis (Thailand ranks first, Turkey ranks third). Experts predict that the UAE, and Dubai in particular, will remain the main destination for real estate investment, which will allow developers from Kazakhstan to successfully implement their projects.
In particular, BI Group is already laying the foundations for future high-rise buildings on the Central, the largest of the Dubai Islands (formerly known as Deira Islands and Palm Deira).
Foreign investors prefer Dubai
Overall, as for other foreign investments, including from the Russian Federation, according to the World Investment Report 2024, published by the United Nations Conference on Trade and Development (UNCTAD), the volume of foreign direct investment (FDI) in the UAE in 2023 amounted to US$30.68 billion. This is 28% more than in 2022, when it amounted to US$22.73 billion.
Between 2020 and 2024, the volume of foreign investment in Dubai real estate will increase significantly. According to the authorities, this figure has grown by tens of percent in four years. In 2020, against the backdrop of the pandemic, the volume of foreign investment amounted to about US$ 10 billion. However, in 2021, an increase was recorded to US$ 13 billion, and in 2022, the volume of investment increased again, reaching US$ 15 billion.
In 2023 and 2024, this trend continued to be confirmed with the expected surge of investment volumes. According to reports, in the first half of 2024, investments in the amount of US$ 8 billion have already been recorded, which indicates that the 2022 record was broken.
New developers are also coming to Dubai from Russia. For example, the Pioneer Group announced its intention to build its first project in the UAE back in 2022. The developer purchased a 0.6 hectare plot of land in Dubai. The project is called ICONIC, and will be built under the MERED brand near the Dubai Internet City metro station and five minutes from Palm Jumeirah. In addition, the media wrote that the company does not plan to attract partners, and is also thinking about other projects in the UAE and expanding its land bank.
1. Pioneer Groop is not the only developer that has entered the UAE market in the last four years. Russian developer Samolet is also planning to expand its geographic projects in Dubai, But for now, there are no specifics about its plans yet. In addition, various projects were announced by Vosh’od, Becar Asset Management, and O1 Properties.
2. The developer Vosh’od announced the Nobu Hotel project with a total area of 70,000 square meters on one of the four islands of the Al Marjan archipelago in Sharjah, having invested approximately US$ 527.5 million.
3. The hotel chain Vertical Hospitality (part of Becar Asset Management), which opened the first co-living in Dubai a year ago, is building another co-living and two four-star hotels in Dubai. The first plot - for co-living - is located in the Al Satwa area. The company plans to purchase the land by April. As for the hotels, they are going to be built in the Business Bay area. These projects will be high-rise, about 48-60 floors. The amount of investment in co-living is about $30 million, in hotels - $200 million. The construction of co-living will last a little over two years. The implementation period for 60 floors high four-star hotels is about four years.
4. In addition, Russian O1 Properties Space 1 network provides a flexible office on 12,635 sq. m in the Emaar Park Heights complex in Dubai. The amount of investment is at least US$ 95.2 million.
5. The St. Petersburg company Orange Group acquired an apartment complex of about 15,000 sq. m in the JVC area. Previously, the building was owned by a development company from Saudi Arabia. Orange Group plans to reprofile the facility by 2025 into a serviced apartment complex with 115 rooms for medium-term stays and launch it under the Izzzi Life Mint brand. It includes a co-working space, a gym, a recreation area with a cinema and barbecue. The investment volume is about US$ 113 million.
6. Segrex Development is another Dubai-based development company from the Russian Federation, specializing in the implementation of turnkey projects. Currently, the company is implementing such projects as Stonehenge, Nicholas and Astoria, as well as private real estate redevelopment projects on the Dubai market.
In total, over the past four years, about 15 Russian developers have entered the UAE market or are considering it. As a result, many of them turn to master developers who purchase plots as part of complex projects.
The growth of the Dubai real estate market and the efforts of the authorities to create an international innovation hub here make it an attractive choice of international locations for portfolio diversification with the help of respected developers.
