UAE groups woo Russian investors

Moscow: Real estate in the UAE represents over 30 per cent of the country's growth, according to senior government officials.

"In the UAE, real estate is the engine of the economy, representing over 30 per cent of the UAE growth," Abdullah Al Saleh, director-general of the UAE Ministry of Foreign Trade, said at the first International Property Show in Moscow.

While Moscow may not be as globally well known as it could be, last year Russian investors plunged around $1.5 billion into UAE real estate, Al Saleh said.

Although the UAE is a very popular real estate destination for many investors, it also offers relatively cheap opportunities.

While the average three-bed townhouse in Dubai costs between Dh1.6 million and Dh3.8 million, according to Asteco, the average three-bedroom apartment in central Moscow costs about $15 million (Dh55.05 million), or around $20,000 per square metre.

Next to figures like this, prices in Dubai look positively cheap. There has been a huge increase in trade between Russia and the UAE, particularly in the real estate sector, Al Saleh said.

As Russia tries to improve its global image, it is looking to the UAE for possible investment opportunities in other sectors also.

"We are strengthening our relationship with Russia. It is a potential market. It is one of the main players in the world. Their economy is one of the largest. The Russian economy last year grew 3 per cent and before that the average growth was about 7 per cent, which is good.

"Since last year, the foreign investment increase in Moscow region was at least 50 per cent, especially from the US and Germany. But we are targeting the UAE," Tigran Karakhov, Minister of Foreign Economic Trade in the Moscow region, told Gulf News.

Russia mainly exports construction materials, wood, steel and some petrochemicals to the UAE, while the UAE mainly exports aluminium, petrochemicals and food stuff to Russia.

UAE developers such as Limitless and Mizin are already heavily involved in projects in the Russian capital. "If this exhibition was organised in another place, it would not have been as special because companies know there is potential in Russia," Al Saleh said.

However, even with such glowing reports, the IPS Moscow did not attract the forecast 15,000 visitors, with the halls relatively quiet.

But, as one exhibitor noted, although the IPS itself was quiet, the international exposure it triggered will make up sales fast.

Others believe despite the financial squeeze worldwide, the time is right for serious investors to buy properties.

"Many voices are complaining that the financial crisis will slow down the real estate sector and create a recession in the world economy. Especially for real estate, we still have a chance to recover from this crisis if developed and developing countries work together," Al Saleh said.