How to invest in Dubai and Indian property?

Estate Up - Dubai Property

Interview with  EstateUp Co-Founder: Aakarshan Kathuria. Estate Up is a platform which allows investors to invest in property in Dubai and India.

What is the story behind Estate up?

EstateUp is the brainchild of Aakarshan Kathuria. It was back in summer of 2014 when there was a high level of investor interest within the real estate sector. He noticed that investors were willing to put down down payments on projects which were not even started and that increased the overall investor sentiment. He too wanted to get involved within the sector, but there was an entry barrier regarding capital required. That’s when he started exploring opportunities to lower the entry capital. In the same year, he met with his friend, Nilesh Jadhav who hails from a real estate development background in Mumbai, and together they discussed the issues that developers in India were experiencing in raising financing from the banks. Aakarshan and Nilesh felt that bringing a solution which caters to both the investors and developers would bring about a new category of investors to the market and shift more activity online. Since then they have been working on EstateUp.

Dubai is planning to build the tallest man-made structure by 2020; this is quite a turnaround from the Dubai crisis in 2009. What is the current evolution of real estate rents and valuations in Dubai?

The crisis in 2009 was long forgotten when there was a high level of interest in upcoming projects from 2012-2014. Since then the market has stabilized and is approaching on the same wavelengths as that of other matured markets. Dubai till date offers some of the highest, if not the highest rental returns on residential and commercial properties. It is not uncommon to find ready properties with 8-10% net rental income, which is excellent for property investments. Various established markets only offer 3-5% net rental income. In terms of valuation, there is still a small gap between what sellers are expecting and what buyers are willing to pay, but if one were to carry out a professional valuation on the unit, it would be very close to what the sellers are demanding. This only proves that while the investors are hoping that they would be able to obtain excellent deals, soon enough they would need to match the asking prices of these properties.

Are the investments on your platform open to anyone around the world?

No, currently our investments are only open to investors within UAE and India. We will open up more markets within the near future. We had previously taken up a project in the USA, but we didn’t achieve our funding target, so we are currently only concentrating on UAE and India.

Do non-residents in the UAE, have to pay taxes on any capital gains or rent from property in Dubai?

Residents or non-residents in UAE alike do not have to pay any taxes on capital gains or rent from any property within UAE.

Are the real estate investments in Dubai from different developers?
Yes

Can you tell us more about your expansion in India? What kind of projects do you have in the pipeline?
We had opened up our platform to receive project listing requests from various developers and the requests from India were amongst the highest. We also received a high level of investor interest and since the team has adequate experience within the Indian market, we felt the time was right to expand. We identified some great partners within Mumbai who are primarily within the real estate and venture capital background; the company was setup to cater to development projects within India. Our model in India is to target developers who are looking to raise funding within 90 days by offering their projects at a 30% discounted rate to our investors. Through this model, we will ensure that 100% of the funds required by the developer are raised from day 1 and the investor obtains an excellent entry price which is better that the market.

You have a property listed in New York, the USA – do you plan to expand to other international cities?

We will only expand to other international cities when we are able to partner up with reputable and well established local partners who have a thorough understanding of the legal framework within the region.

What should potential investors be aware of in terms of currency risk?

Investors understand that their expected return through capital gains or rental income would depend on that foreign exchange rate, so they factor that within their potential ROI.

Can you tell us about the success rate of the project on your platform?

We have launched four projects on our platform, out of which we have had a 50% success rate. If we are unable to raise funds required for a project within 90 days, then they are returned to the investor, so in some cases, we have had repeated investors within our project. One of the projects on our platform raised 100% of the funding required within four days of going online.

You have a project which has been launched in 2015 “Project – Dubai Residential Complex” can you give us more information on the progress and valuation of this property?

This was the first project we launched and not having the required user base and exposure at that point, we were unable to reach our funding target. The developer of the project has since raised private funding, and the project is in the construction phase.