Kavan Choksi on Shared Property Ownership in Dubai

 

As values increase in the first half of 2022, investors find that shared ownership of Dubai homes can be a good source of income. Kavan Choksi thinks shared ownership of houses and offices in Dubai seems to have struck a chord with investors, even if property value gains don't accelerate as quickly in the coming months.

A representative for Azizi Developments stated that fractional title deeds, in which many owners—up to four for each home—share the same rights on the property, now make up one in ten of the properties the company sells. If one investor decides to withdraw, Kavan Choksi thinks it is best if they sell their shares without affecting the rights of the other three in any way.

The developer is currently in the advanced stages of construction and handover at its Riviera project in MBR City. They have made several fractional property ownership sales, which Kavan Choksi presumes has been a particularly recent popular option for retail units.

Image Source: Photo by Bruce Kamm on Unsplash

Other developers also recognize the potential of fractional ownership, leaving it up to investors to choose how they wish to participate. Dubai first started giving numerous documents on a single property last year. Since then, local auctions for selling a "share" in properties have been taking place.

Since January 2021, Dubai's real estate market has been booming, first because of end-user purchases and then thanks to foreign investors choosing the city as their primary or secondary residential base. Kavan Choksi thinks the latter explains why the luxury end of the real estate market has seen such high demand.

In the midst of it all, investors have also gathered their resources to purchase indirect exposure to real estate. This method has purchased apartments at Dubai Marina, the Downtown, and Business Bay.

According to fractional ownership, only up to four buyers can receive deeds on a property. However, sellers can create a special vehicle to grant additional buyers rights to the same unit.

Kavan Choksi believes real estate investments provide higher upside potential than alternative assets like cryptocurrencies in the current environment. Many investors are switching over by purchasing a full unit or part of one.

Using Market Timing

Kavan Choksi thinks it's not easy to time the market as an investor. What matters is how long you stay in the market rather than when you enter it. As a result, Choksi suggests creating a robust investment portfolio that can endure market situations by investing in uncorrelated assets.

After selling an investment in a property near Dubai Marina, SmartCrowd claims it generated a total net return (rental income plus capital gains) of 39.25 percent over 17 months and a return of 27.92 percent annually.

Fifty-three investors purchased the Marina Bay Central studio apartment through the SmartCrowd platform in February of last year for Dh530,000 and sold it this month for Dh780,000. It amounts to a gross capital appreciation of 47%.

Investors can contribute as little as Dh500 to SmartCrowd, a fintech company with its headquarters in Abu Dhabi. The company's goal, according to Farid, is to make alternative asset investment options more accessible to all investors.