As Dubai Moves Towards Tier-1 Status, Foreign Investors Eye Relocation

Forbes

4 days ago

Accessibility is one of the factors propelling Dubai to Tier-1 city status: 3 billion people live ... More within a four-hour flight of the UAE's most populous metropolis. The next phase of its 2040 Urban Master Plan will create a "20-minute city," where residents can reach 80% of their daily destinations within a 20-minute walk or cycle ride.
The projects the European client toured looked reasonable. The yields? Attractive. On paper, everything made sense.
Then, things took a turn.
As any seasoned real estate advisor might, Abdullah Alajaji of Driven Properties guided his client beyond the spreadsheets. There was white-tablecloth dining in Dubai International Financial Centre (DIFC). Then, a bout of relaxation on a private beach followed by a leisurely stroll through the city's luxury retail districts. Flagship boutiques from Milan and Paris lined the promenades, conjuring images of home.
'That left an impression,' recalls Alajaji. 'Then, his mindset started to shift.'
Cap rates and returns faded into the background. The conversation turned toward community, wellness and long-term living. By the end of the trip, the European client purchased two units—one purely as an investment, the other for his personal relocation.
'What sealed the deal wasn't the yield,' said Alajaji. 'It was the lifestyle—the safety, the infrastructure, the ease of living in Dubai. That's what turned a business trip into a life decision.'
The UAE continues to be a leader in attracting HNW and UHNW individuals. In 2023 alone, the region ... More saw an influx of around 4,500 new millionaires, placing it second globally.
This shift is becoming more common. According to a new report released by Driven, Dubai is quickly transitioning from a high-growth, speculative market to a bona fide tier-1 global city. In its inaugural Tier-1 City Index, the firm ranks Dubai fifth out of seven benchmark cities, outperforming Paris and Hong Kong, and landing just behind global stalwarts like Singapore, Sydney, London and New York.
The index—based on in-depth interviews with real estate developers, investors and brokers, as well as finance professionals—evaluates 28 indicators across six pillars: infrastructure, governance, economy, safety, quality of life, and international appeal. Dubai scores particularly high on infrastructure (2nd), global appeal (3rd) and quality of life (4th).
Last year alone, Dubai recorded 226,000 real estate transactions totaling over $207 billion—a 20% increase in transaction value year-over-year, according to the Dubai Land Department. In the first quarter of this year, residential sales surged another 30% compared to the same period last year.
All towers welcome in Dubai International Financial Centre—its dynamic skyline is a bellwether of ... More the institutional investment that brings foreign professionals and their families with it.
The physical cityscape reflects this growth. Take Ciel Dubai Marina, poised to become the world's tallest hotel. Or ICD Brookfield Place in DIFC, a 53-storey tower developed in partnership with the Investment Corporation of Dubai. Last year, Brookfield sold a 49% stake to international investors in a deal reportedly valuing the property at $1.5 billion. Now, Brookfield is planning a new mixed-use development in Dubai Hills—its first residential venture in the area.
'Institutional capital is pouring in,' says Alajaji. 'It shows confidence.'
But to understand how Dubai reached this inflection point, one must rewind to the global uncertainty of 2020. As much of the world shut down, Dubai took a contrarian stance: reopening its borders by July, launching long-term 'retirement' visas, and injecting $86 billion into the economy across five stimulus packages. It was a calculated bet on openness—and it worked.
'That was the moment I knew something had changed,' says Alajaji. 'When clients from Europe, Asia and North America started calling not just to buy, but to ask, 'How do we set up our lives here?''
Abdullah Alajaji, CEO of Driven | Forbes Global Properties: "Investors don't just want stability or ... More returns. They want to be part of something that's still evolving."
Today, Dubai's appeal goes far beyond its tax advantages. The city offers a blend of efficient governance, safety, world-class infrastructure, and high-end amenities—the core elements that global investors and residents increasingly prioritize.
'Dubai still feels like it's in motion,' Alajaji explains. 'It's adaptive. Ambitious. That sense of momentum matters. Investors don't just want stability or returns. They want to be part of something that's still evolving.'
Driven's sentiment survey, released in May 2025, reveals that 73% of market stakeholders believe Dubai is either already a tier-1 city or will become one within the next decade. This optimism is reinforced by tangible indicators: long-term residency programs, digital infrastructure rollouts and steady population growth.
As the market matures, cap-rate compression is expected. Today, Dubai's investment properties yield between 6% to 8% annually—a figure considerably higher than most tier-1 peers. Yet institutional capital is increasingly willing to accept lower yields in exchange for long-term stability.
'This shift won't happen overnight,' says Alajaji. 'But the signs are already here. More joint ventures. More capital with a long-view mindset. Dubai is aligning with the world's top investment markets.'
The pace may be slowing, but that may be exactly the point.
Dubai's transition to a mature market is no longer theoretical. It's playing out in the numbers, buyers and buildings. The trajectory is set. Now comes the follow-through.
Driven Properties is a member of Forbes Global Properties, the invitation-only network of top-tier brokerages worldwide and the exclusive real estate partner of Forbes.