China is becoming a major player in Middle Eastern real estate, with activity driven by tourism and the Belt & Road Initiative.
Both the overland Silk Road Economic Belt and the Maritime Silk Road, which aim to boost trade links between China and Europe and China and Africa, run through the Middle East.
The UAE, particularly the trading centre of Dubai, is expected to be a key beneficiary of Chinese investment interest in the next few years. Large state-owned construction companies such as China State Construction Engineering Corporation (CSCEC) and China National Aero-Technology International Engineering Corporation already have a number of projects underway.
For example, CSCEC has committed to 16 projects in Dubai, mostly in the residential sector, but also in retail and hospitality. The firm is also active in other Emirates; in January CSCEC signed an agreement with Ajman Holdings to build a US$136 million shopping centre in Ajman, one of the UAE’s emirates.
Chinese construction companies are mostly involved in hospitality and residential projects although JLL is “also seeing more activity in the retail and commercial sectors.”
Dubai is home to Dragon Mart, a shopping mall said to be the largest trading hub for Chinese products outside of Mainland China, with more than 3,500 retailers. Developer Nakeel Malls plans to expand the mall into Dragon City, a mixed use development which will capitalise on Chinese influence in Dubai.
At the new masterplanned city of Dubai South, the China Business Hub is intended to become home to hundreds of new Chinese businesses. “China Business Hub will allow Chinese companies to smoothly set up and quickly develop their business in the region and to facilitate all processes such as visa applications,” says Andrew Williamson, Head of Retail at JLL MENA.
A new destination
It’s not just business attracting Chinese visitors to the UAE, tourism is increasingly important.
According to the Dubai Statistics Centre, the number of visitors from China to Dubai rose 49 percent to 573,000 in the third quarter of 2017 compared with the same period the previous year.
China is also now the biggest source of tourists for Abu Dhabi, with 242,000 visiting in the first nine months of last year, up 68 percent on 2016.
CSCEC and other Chinese construction firms are working on five hotels in Dubai, with others expected to follow as more Chinese tourists and business travellers arrive in the Emirate, said Amr El Nady, Head of Hotels & Hospitality MENA at JLL.
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