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Tuesday, May 30, 2023

UAE’s growing ultra-rich cohort wants Dh100m homes, jets, yachts – and they get them

DUBAI: The UAE has long been the shopping capital of the Middle East – but these days, a “shopper” is likely to buy a private jet or a luxury yacht in the UAE. Along with the AED100-600 million homes that are often snapped up.

The permanent base of the UAE’s ultra-wealthy has increased significantly since 2021 — “in addition to their Rolls-Royces, Bentleys and Ferraris to fill their garages, these people need their boats and jets,” one “It can be seen in the number of inquiries that are still asking for homes on the water or as close as possible to a marina where there is room for a yacht.

“AED 100 million home sales are considered routine transactions these days – the ‘new normal’ is developers proposing AED 200 million+ homes and finding buyers easily when they are ready in 2-3 years. “

Naturally, their purchases expand into other categories — jets and yachts, to name just two — and that’s what businesses are trying to deliver.

buy your next yacht

The growing resident base of the ultra-wealthy can be seen at the Dubai International Motor Show, which kicked off on Wednesday (March 1) in Dubai Harbour. The berths are filled with the latest luxury yachts, with multi-million dollar price tags. Some (or many) of these boats are already labeled “Sold.”

With many debuting brands presenting their boats at DIBS, industry sources say the Dubai event has become as important as any show held in Cannes or other well-known marinas in Europe or the US.

“Today, a lot of demand for luxury yachts can come from the Gulf region, or from Europe or the US,” said Gulf Craft Chairman Mohammad Hussein Al Shali. “What we are showing at DIBS 2023 is a brand new yacht — There aren’t any pre-owned yachts.”

private jet

First-time buyers have also driven record sales of private jets in the region, especially from the UAE, Saudi Arabia and Qatar. “Demand has essentially superseded supply,” said Mark Abbott, chief executive of Vertis Aviation Aircraft Trading in Dubai. “Aircraft brokers have done exceptionally well due to a severe inventory shortage over the past two years.

“We saw a new generation of buyers and decided to integrate the brokerage business with our existing charter business.”

That means setting up shop in Dubai.

A boom in wealth, stronger demand for leisure experiences and the easing of pandemic restrictions have propelled the business aviation industry in recent months. Many interested in private jets are moving from chartering to actual ownership, Abbott said.

Inventory Private Jets

Image credit: Shutterstock

How much do these planes cost?

Depending on size, range, model and features, the price of a private jet can range from $2 million to over $100 million. “A used Learjet 45 or Cessna Citation CJ3+ plus can run from $3 million to $4 million,” Abbott said. “A mid-range Challenger 300 or 350 could cost between $10 million and $20 million, while an ultra-long-range jet could cost between $25 million and $75 million.”

The use of private jets soared to an all-time high last year. Aviation data research firm Wingx recorded 3.3 million business jet departures in 2021, the most in a single year and 7% above the previous high in 2019.

More buyers are waiting

The study found at least 300 billionaires in the region. Saudi Arabia has the highest number of millionaires in the Middle East at over 224,000. “There are less than 800 business jets in the region right now,” Abbott said, which is a good foundation for growth.

Especially if you consider new residents who have made their home in the UAE and elsewhere.

“The fact that Dubai’s luxury residential market remains severely undersupplied – with only eight new villas expected in prime locations in the city by 2025 – and more affordable than its global counterparts also adds to the overall appeal of owning a home in Dubai Elite. Elite,” said Faisal Durrani, partner and head of Middle East research at property consultancy Knight Frank.

“In fact, $1 million for a prime residence in Dubai equates to about 1,130 square feet of space, about five times that in Hong Kong (similar homes) and three times that in London or Singapore.

“These factors have boosted business and economic confidence, which in turn has driven demand for luxury homes.”

The same goes for jets and yachts…

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