The contraction of the French real estate market has intensified over the last 24 months and as we enter 2025, Dubai is an increasingly popular market for French investors to diversify into.
French investors have seen their domestic market slowdown with only 42% of the average level of commercial real estate investment in Q4 of 2023 and only 50% of residential real estate investments made during the same timelines.
In fact, as far as the residential market is concerned, over the full 2023 financial period, total investment in French property amounted to EUR 11.6 billion, compared to EUR 25.5 billion in 2022 – a significant drop of 57%.
Over the past two decades, French investors have increasingly turned their attention to the Dubai property market, drawn by the promising investment prospects in the Emirate.
In fact, France was one of the top ten countries to invest in Dubai property during the past few years. Even before that, back in 2020, it was estimated that almost EUR 1.6 billion worth of Dubai property was owned by French investors.
Like most global investors, France has recognised the potential of Dubai’s property market, which is currently experiencing its third growth cycle. Dubai stands out as one of the world’s top-performing property markets, offering substantial growth and appealing returns while other assets falter in a challenging macroeconomic environment.
More and more French investors are acquiring assets in Dubai. The following statistics show significant evidence of French investors within the Dubai property market. They are reflective of French confidence in the Emirate’s real estate sector and its potential for a favourable return on investment.
Portfolio and price-point diversification
French investors are actively diversifying their investment portfolios in Dubai’s property market. In the past, investors were predominately buying apartments. In contrast, now they are confident enough to purchase higher-ticket-priced residential assets such as villas and commercial or hospitality assets.
First conference amid surging demand
2023 saw the first Gulf Vision event in Paris. The flagship conference organised by Business France promoted investment between the two countries, with over 1,000 meetings taking place within a 48-hour period. Since then, French investors have continued to be actively welcomed by the Dubai and UAE authorities.
French investors are more understanding of several key factors that make Dubai an attractive investment destination:
Similar to other international investors, French investors are acquiring real estate in various key areas in Dubai, including:
Submarkets with more villas or townhouse stock, such as The Palm, tend to be more expensive, while apartment-dominated areas offer more affordable options. Most first-time French investors favour more apartment-focused markets, but there’s proof that the French appetite for villas and townhouses is steadily increasing.
Dubai’s property market has undergone significant changes in recent years, focusing on sustainability and transparency – encouraging cross-border investment from new markets such as France.
The Emirate now boasts the most transparent property market in the Middle East and North Africa region, garnering recognition from global consultancies. Investors from around the world can now benefit from enhanced policies and regulations implemented by the UAE government, promoting transparency and instilling confidence in long-term investments.
Trade between the UAE and France hit EUR 7 billion (USD 7.6 billion) in 2023, and it’s set to grow even more this year. This boost is thanks to the deepening investment and trade ties between the two nations. France is particularly keen on expanding partnerships in renewable energy, mobility, health, technology, and AI.
Franck Riester, France’s Minister of Foreign Trade and Economic Attractiveness, emphasised the strong relationship between the UAE and France. He pointed out that there are 600 French company subsidiaries in the UAE, highlighting the significant presence and ongoing commitment of French businesses in the region. Both countries are eager to enhance their future trade and investment collaborations.
Recently, a high-level business council meeting in Paris, co-chaired by Dr. Sultan Al Jaber and Patrick Pouyanne, focused on strengthening these ties. France’s Finance and Economy Minister Bruno Le Maire also attended, underscoring the importance of this partnership. This growing economic relationship is a key part of the broader trend of French investment in Dubai’s property market.
France, the second-largest European economy, anticipates significant oil and non-oil trade growth with the UAE over the next 12 months.
While the traditionally strong luxury goods and aviation sectors are expected to remain the primary drivers of growth going forward, individual investments in the Dubai property market will continue to increase further.
All this investment activity has happened despite a rapidly changing world marked by pandemic-driven economic uncertainty and the conflict in Ukraine. French investors, like many others worldwide, now see the Dubai, UAE, and GCC markets as some of the fastest-growing and strongest-performing opportunities available. This sentiment is predicted to become more mainstream in France over the coming years.
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