Dubai looks to capitalise on weak dirham to lure British home buyers

By Luke Tyson, Hadeel Al Sayegh and Iain Withers

DUBAI/LONDON (Reuters) -Emirati real-estate developers are looking to lure British investors to the United Arab Emirates where a weaker dirham, pegged to the U.S. dollar and battered by Donald Trump's tariffs, has made property significantly cheaper for buyers with pounds.

Their push to target British investors locally with new London offices comes as UAE developers contend with a domestic market that has been one of the best-performing globally but is now prompting concern about oversupply and too few buyers.

In the past year, UAE developers Binghatti and Danube have established sales offices in London, joining Aldar, Damac and Sobha.

"The currency makes a big difference," Danube Chairman Rizwan Sajan told Reuters, referring to the weak dirham and strong pound. Binghatti CEO Muhammad Binghatti said he had seen more British investors enter Dubai as the dirham weakened.

U.S. President Donald Trump's sweeping tariffs have dragged down the dollar and, by extension, the dirham. The dirham is down about 8% versus the pound since January - handing British buyers an effective discount to enter the UAE's property market.

Property agents report a move by some wealthy people out of London due to higher taxes, although the evidence so far is largely anecdotal. Senior London-based agents at CBRE and Knight Frank told Reuters Dubai was among a select group of top destinations for those leaving London, alongside wealth hotspots Monaco, Italy and Switzerland.

In a bid to lure British buyers, Binghatti is offering flexible payment plans and special pricing to UK investors, while Damac has teamed up with Chelsea soccer club to launch branded residences in Dubai that appeal to British buyers.

After a period of decline, British investment in Dubai homes jumped 62% year-over-year in the second quarter of 2025, according to UAE brokerage Betterhomes. That made UK residents the emirate's top foreign property buyers for the first time since 2023, overtaking Indian nationals, the brokerage said.

Emirati property has emerged an unexpected winner from U.S. tariffs, as investment flows into less-impacted emerging markets. Traditionally reliant on oil revenues that swell when the dollar is strong, the Gulf country is now leveraging sectors like property and tourism to draw in capital.

After a run of soaring prices, some experts, however, predict a downturn in the Dubai market.

In May, Fitch forecast a potential 15% contraction in Dubai property prices through late 2025 and into 2026.

Some see London as a way to diversify operations as well as a sales hub, in another sign UAE developers are turning overseas as the local market becomes tougher.

Damac, Aldar and Modon have all launched development arms for building properties in the UK through subsidiaries or joint ventures — most recently in January 2025.

After setting up their London sales offices, both Danube and Binghatti told Reuters they were weighing similar moves into UK property development, despite the weaker dirham denting their buying power.

Aldar's UK-based subsidiary London Square has secured 15 new land sites and launched six developments since late 2023, according to chief executive Talal Al Dhiyebi.

The UAE developers are using falling UK property prices to try and attract wealthy Emiratis, who now make up 3% of London investors— a fivefold rise from just 0.6% a year earlier, according to Knight Frank.

(Reporting by Luke Tyson and Hadeel Al Sayegh in Dubai and Iain Withers in London, Editing by Tommy Reggiori Wilkes, Alexandra Hudson)