A certain degree of risk Essay Example

even exceeded their projected annual return of 15% in terms of Internal Rate of Return. According to the NDB Report, commercial property investment in Europe experienced significant growth in 2006, with shares rising up to 50%, making up 41 to 46% of global trade.

Increased investor interest and favorable potential returns on investment have been caused by higher prices and lower yields as noted by NDB. The Dubai Investment Fund, which is a partnership between Investors Provident and Caledonian Investments Ltd., serves as proof of a good rate of return.

(Source: investorsprovident.com, 2005) The investment fund's objective was to extend its investments into Dubai and the Gulf Region's residential, commercial, and industrial projects. It aimed for an annual rise in capital growth rate between 15 to 20 percent with past endeavors resulting in a return rate of 30%.

Over the next four years, Dubai's real estate sector is projected to grow by 15-20%. The low tax rates of Dubai's tax system are particularly attractive to foreign investors seeking to increase their profits. This can be seen in cases where certain investors are able to save up to $100,000 on a two-bedroom apartment due to these favorable tax rates.

Nicholas Marr (2006), director of Marr International Ltd, noted that Dubai provides a favorable tax environment for investors, resulting in substantial savings. Moreover, compared to other major cities, property prices in Dubai are comparatively inexpensive. For example, while London's Docklands area charges around $5,000 per square meter for an apartment, purchasing a villa in Dubai only costs approximately $1,000 per square meter. Henceforth, depending upon their preferences for property type and location, investors can choose between acquiring a villa in Dubai

at $1,000 or an apartment in London at $5,000 per square meter.

When it comes to quality properties in Dubai, villas are seen as more luxurious than apartments. The city boasts high economic growth and plenty of opportunities. In fact, the country's impressive economic progress has been covered in the paper's economy section. As a result, investing in Dubai is becoming increasingly attractive due to improved economic conditions. Smart investors always take into account the economic climate of a location before committing their funds and with Dubai's economy on an upswing, there is potential for greater returns on investments.

Dubai's economy has grown continuously for twenty years, presenting foreign investors with a favorable prospect.