The UAE is facing a major problem: the real estate market is booming and there is no shortage of buyers. Rents in Dubai rose 23% year-on-year in 2024, back to pre-pandemic levels, and sales are up 18%, according to figures. Deloitteand this upward trend has started continue in the coming years.
No doubt some of that demand is spilling over to neighboring Abu Dhabi, which is likely why the city's sovereign wealth fund, Mubadala Investment Company, recently participated in a $14 million Series A round raised by Dubai-based Stake, which was led by the Middle East. Venture Partners with participation from Aramco's Wa'ed Ventures and private investment platform Republic.
The company is bringing its fractional real estate investment platform to the UAE capital next year, with expansion into Saudi Arabia in the coming months.
For Abu Dhabi, supporting companies like Stake, which make it easier for people to participate in the real estate market by purchasing a share of a particular property, is a good approach to boost investment in the real estate market. The emirate has become a residential hub over the years for people who work in Dubai but find living in the city too expensive, and it also fits in nicely with Abu Dhabi's long-term plan to diversify its revenue streams away from oil and gas production. .
The Stake process is simple for real estate investors. This allows you to buy a share in a property that it manages on behalf of the shareholders and earn a portion of the monthly rent. If the property is sold, the investors also get a share of the profit. Stake also allows investors to sell their stake on a secondary market called Shut down Windows that it is opened every six months.
Stake, founded in 2020 by Manar Mahmassani, Rami Tabbara and Ricardo Brizido, wants to use the new money to fuel its international plans – most of the money will be used to enter and expand Saudi Arabia in the coming months to Abu. Dabi next year. Some of the money will also be used to provide more options in Dubai, such as investing in commercial real estate. The startup has raised a total of $26 million to date.
Currently, Stake has more than 200 properties under management with investors from all over the world. The UAE is home to the most customers, and people from Saudi Arabia and Kuwait make up the bulk of the international customer base. About 12% of customers come from the US, Canada and the UK
Stake has been planning to expand beyond Dubai for some time – it had originally announced its entry into Saudi Arabia and Egypt in 2022, but postponed those plans citing economic volatility. Earlier this year, the company made partnered with US-based private investment platform Republic to attract more foreign investors.
And to attract more international investors, the startup, in partnership with the Dubai International Financial Center (DIFC), is offering investors who stake a minimum of AED 2 million (~$545,000) a golden visa (a 10-year renewable residency visa) in Dubai . That program was introduced in 2019 to attract foreign investment in the region, and there have reportedly been initiatives like this helped foreigners driving force real estate investments in the region.
The company says it returns about 4% to 7% to its customers through rental income. Tabbara, who is co-CEO of Mahmassani, told JS that the company has paid $4.5 million in rental income to its customers to date. He added that the average real estate investment is $1,500, and customers invest an average of $5,600 through the platform.
Enter Saudi Arabia
Stake claims it has surpassed Dubai-based fractional real estate investment platforms such as Smart crowdbut in Saudi Arabia it will start again.
Saudi Arabia already has companies such as Awaed and Aseel, which allow customers to invest in real estate through funds. Historically, only Saudi nationals could own property in the country. Real estate investment companies therefore set up special vehicles through which they allow investors to purchase real estate.
“Saudi Arabia has properties that have recently been completed and are under development and are worth billions. We're going to use [our] experience to offer a similar unified product for investments in Saudi Arabia within the same app,” said Mahmassani.
Mahmassani noted that Stake aims to break even in Dubai by the end of this year and be profitable next year. The startup is also exploring partnerships to help Middle Easterners invest in properties in countries like the US
