Dubai investors pour funds into China
An influx of funds from Dubai has moved into the mainland property market at a time when the real estate industry at home is probably close to saturation point.
With development of new projects beginning to slow, Dubai's top-end residential market has less room for further growth, according to analysts.
And an increasing number of companies are looking abroad to diversify their investment.
'Petrodollars are increasingly going to countries in the emerging world,' said Steve Brice, regional head of research for Middle East and South Asia at Standard Chartered, in a recent report.
Last week, Dubai World, the parent company of DP World, signed a deal to develop the Xiaomaidao island in Qingdao, Shandong province, into a tourist and business centre with hotels, shopping malls, marinas, residential properties, offices and a convention centre.
Damac Holding, the first UAE-based group to enter the mainland property market, is upbeat about China's outlook.
'The country has potential for substantial real estate and economic growth and we plan to introduce a number of projects within the country,' said Damac chairman Hussain Sajwani.
Damac Properties will develop a massive residential-retail-office-hotel project in Tanggu District, Tianjin at a total investment cost of US$2.7 billion. The five million square foot development includes a marina with a capacity for 100 boats.
Meanwhile, Emaar Properties, which is constructing the world's tallest building, the Burj Dubai tower, will open an office in Shanghai this month as part of its ambitious push overseas.
Mohsin Khan, director of the International Monetary Fund's Middle East and Central Asia department, said Arab Gulf states were once content to park their money exclusively in western banks and bonds, but things had changed. 'Gulf Arab investments would now target the Middle East and South Asian regions,' he said.