Investors eye Dubai hotels despite crisis

Dubai: More foreign buyers eye hotel properties in Dubai for investment as returns remain high despite the global crisis, but sellers are scarce and deals are hampered by the difficulty to get loans, industry experts said.

"If you compare five-star properties in Paris and Dubai, both well-located, your return on investment is much better in Dubai," said Amine Hamdani, manager and surveyor at global real estate service company CB Richard Ellis.

While investors' net income for a property in France will be around 15 per cent today, Dubai properties can generate around 35 per cent, Hamdani said. International hotel investment could fall as much as 58.3 percent to $10 billion in 2009 as the global financial crisis spreads to the leisure and tourism industry, according to hotel consultancy firm Jones Lang LaSalle Hotels.

Hamdani said more international buyers were looking at investments in existing properties in Dubai, but few owners were selling. High net-worth individuals comprise the majority of buyers who look for high returns on investments, while institutional investors aim for nine to 11 per cent return, he said.