Salford-based property entrepreneur Pervaiz Naviede is today launching a company designed to give small investors the opportunity to invest in property in Dubai.
The company, Dubai Realty Opportunities, will buy property in bulk off-plan and is offering shares for a minimum of £2,400.
It will speculate on the value of the property rising, as well as gaining from the difference between the value of bulk and individual sales.
Around 15% of the property purchased will be retained and leased.
Naviede owns Salford-based residential developer LPC Living, which is developing schemes across the North West valued at £100m.
He is also chairman of Legendary Property Company, which owns property in the UK, Germany and Dubai and was one of the highest newcomers on this year’s Sunday Times Rich List, with a fortune of £145m.
Nozmul Islam, chief executive of DRO, said: “We intend to follow a prudent strategy and only become involved in transactions where we have the funds available to see them through to completion, rather than operate on a more speculative basis.”
The company will be launched on the OFEX market, which specialises in small and medium enterprises.
Naviede’s family trust will invest a fifth of the £5m being raised in the initial offering.
DRO aims to provide a dividend yield of 10% on the initial subscription price, as well as a capital gain on investments.
The company eventually aims to raise £50m from private investors, giving it a total war chest of up to £100m.
Islam said he believes the company is in a strong position to exploit the formalisation of freehold status in Dubai, which is expected to enhance demand for real estate in the region.
DRO is also expected to qualify for Business Asset Taper Relief, which means that UK higher rate tax payers will only pay tax at 10% on any capital gain, provided they keep their investment for at least two years.
The company is being advised by CB Richard Ellis and Asteco, which is the United Arab Emirates’ largest property management company.
Jerry Oates of Asteco has joined the board of DRO as non-executive director.
References: EGi News 13/06/05
