DIFC Za’abeel vs Expo City: Where Should You Invest AED 5M?

Tim Elliott (0:00)

This is the Morning Drive, time for real estate here in Dubai once again. Ajay Menon is the CEO of Luxe Vista Real Estate. Welcome to the studio, nice to see you.

Ajay Menon (0:10)

Good morning Tim.

Tim Elliott (0:11)

We are resplendent in yet another 70s aftershave, another one to add to the collection.

Every Tuesday morning at 10 o'clock, this room smells delightful, I have to say. You have to be here to understand it. Look, today Ajay, putting two distinct macro plays head to head. I'm interested in this, so I'm just going to let you talk. And every now and again, I'll butt in with probably a stupid question, but you're used to it now. DIFC Za'abeel District, perhaps the future financial lifestyle extension, versus Expo City, the emerging trade logistics and innovation corridor. Two very distinct areas of Dubai. The question, and should you choose to accept this, please answer this one. Are you buying scarcity, or are you buying Dubai's next growth engine? So that's kind of where we are.

Is this something that you mull over at the weekends and consider?

Ajay Menon (1:11)

Yes, and it's not just me. I mean, when I went to this briefing of DIFC, there was quite a few other brokers who came with me, and they asked me this question. I mean, DIFC seems to be like a heavyweight champion, and Expo City looks more like a bantamweight champion.

At the moment. At the moment, yeah. Can you really compare between the things, who will buy this and who will buy that? And which one is a better investment?

Tim Elliott (1:39)

Yeah, so here's the question for you, right? Okay, so let's break down an investment thesis.

You're asking a question today, and hopefully trying to answer it. If you had 5 million dirhams to invest in Dubai Real Estate today, what would you do? Where would you go from these two options? So let's, before we go anywhere, let's consider the amount. 5 million dirhams, 1.36 million dollars, 1.175, 360 euros. Indian rupees, 130 million. Pakistani rupees, 380 million. In British pounds, 1 million pounds. Okay, so that's where we are. So that's a lot of money. That needs strategy, right? It's serious capital.

It's a heavyweight ticket in any city in the world, but you can get something pretty good for that here in Dubai.

Ajay Menon (2:32)

That is correct. That is exactly why I put 5 million dirhams as the base case, not a one to two million dirhams base case. Everybody seems to be focusing these days. This is the clash of the titans, right? So what are we looking at? DIFC.

DIFC is not simply a business district in Dubai.

Tim Elliott (2:50)

DIFC 2.0.

Ajay Menon (2:52)

Let's start with DIFC first.

Tim Elliott (2:54)

Okay.

Ajay Menon (2:54)

DIFC already operates almost 10,184 companies, and it is a huge success. It is a globally recognized financial center.

Tim Elliott (3:04)

Yeah.

Ajay Menon (3:05)

There's everybody who wants to be here, and who's not here, who will again want to be here.

And then this Za'abeel District is a massive expansion onto that particular ecosystem. So what is Za'abeel District? So when Trade Center moved, or is in the process of moving to Expo City, they've got 7.1 million square feet of land, where they will have a lot of offices and only 4,000 presidential units.

Tim Elliott (3:38)

Okay.

So pretty scarce. So in short supply?

Ajay Menon (3:41)

In short supply. And DIFC is not cheap by any standards.

It is, the market is priced because market understands and recognizes its current position as a strong financial center.

Tim Elliott (3:55)

Yeah.

Ajay Menon (3:56)

Right. So you're paying for that premium right now. But again, let us look at who is living there, who is going to work there, who will invest there versus the Expo City. Luckily, both these locations are not competing for the same people.

Two different categories, two different people, two different lifestyles, two different investment profile. So when we are looking at DIFC, we are looking at family offices, private equity, hedge funds, consulting services, corporate law firms. So that's a different type of segment.

Tim Elliott (4:36)

Sure. It's diametrically opposed.

Ajay Menon (4:39)

Exactly.

Tim Elliott (4:39)

As it is geographically in Dubai terms as well. Correct.

Ajay Menon (4:43)

And what is happening is these people have a different purpose of choosing their units. They are looking at proximity, they are looking at convenience, they are looking at prestige.

And that is why these are not the people who are looking for the cheapest apartments in town. So they have the way of the law.