Brookfield Commits to Mixed-Use in Lux Dubai Hills Estate

Brookfield Asset Management is making another sizable bet on Dubai real estate as the Iran war drags on.

The Canadian private equity giant is teaming up with Gulf retail heavyweight Alshaya Group on a mixed-use development in the luxury Dubai Hills neighborhood, Bloomberg reported. The firms plan to develop a 480,000-square-foot project in the master-planned community, with Brookfield overseeing development and asset management for the venture. Overall cost of the development was not disclosed.

The endeavor marks Brookfield’s first major regional real estate push since the Iran war erupted earlier this year. The project will include Class A office space, build-to-rent apartments and retail, while Alshaya plans to relocate its United Arab Emirates headquarters to the development once completed. Alshaya, founded in Kuwait, operates brands in the region including Starbucks, American Eagle and H&M and introduced Primark and Ulta Beauty into Dubai in recent weeks. Dubai Hills, also known as Dubai Hills Estate, has been developed by Emaar Properties, the Burj Khalifa developer headquartered in Dubai Hills.

Brookfield is no stranger to the Emirati metropolis, and the U.A.E. and the Gulf at large. It helped develop the marquee ICD Brookfield Place office tower and has expanded into luxury residential with the Solaya waterfront development. Just last month, Brookfield CEO Bruce Flatt flew to Abu Dhabi last month to meet Crown Prince Sheikh Khaled bin Mohammed. The firm has also continued pursuing infrastructure and energy deals across the Gulf, including considering purchasing interest in Kuwait Petroleum Corporation’s pipeline assets.

Brookfield’s move comes as years of explosive population growth fueled by wealthy expatriates, cryptocurrency money and international investors fleeing higher-tax jurisdictions turned the city into one of the world’s hottest luxury housing markets after the pandemic. Institutional capital followed, with global investment firms like Brookfield increasingly treating Dubai as more than just a capital-raising stop.

The hot streak appears to be cooling, however. Residential values have begun slipping for the first time since the pandemic, and the prolonged regional conflict is diminishing buyer confidence and demand, according to Bloomberg. Still, Brookfield is pushing forward with its Alshaya Group collaboration because of its “conviction in the long-term fundamentals of the region,” Jad Ellawn, managing partner and regional head for Brookfield Middle East, said.

— Chris Malone Méndez