Afghan cash buyers target Palm Jumeirah

Wealthy Afghans are pouring millions of dollars into the UAE property market, in the run up to NATO withdrawing from the country in two years time.

According to a number of estate agents spoken to by Arabian Business, properties in the Palm are amongst the areas being targeted for cash deals.Wealthy An estimated $8bn is believed to have been stashed away in Dubai by Afghan investors in recent years, according to experts.

“They come and spend cash and they know what they want. They are mainly looking for the Palm. Just right now, we have two or three big negotiations that we can close… We are talking about AED9m ($2.45m) plus.” said Gabor Szalay, director of Provident Estate.

“In the last couple of months, we have seen an increase in enquires in nationals from there,” added David McCormack, group operations director at the Dubai-based Olive Property Group.

In 2009, ahead of the last Afghan election, millions of dollars made its way out of Afghanistan in suitcases and even on pallets loaded into aircraft, according to police at Kabul’s main airport.

Former vice president Zia Masood was stopped entering Dubai carrying cash worth $52m and released without question, according to a cable from the US Embassy in Kabul that appeared on the whistleblower website Wikileaks.

In 2010 the Afghan government took over Kabul Bank – the country’s biggest commercial bank – after a run on deposits caused by revelations that the bank’s owners had lost millions of dollars they loaned to themselves to purchase property investments in Dubai.

It is not just Palm apartments that are the target for Afghan cash buyers, McCormack said they are also looking to invest in companies and smaller properties which offer stable returns.

“It is really just securing their future… a lot of the Afghans we speak to, and we speak to many high profile Afghanis, they are all concerned about the longevity of the Afghani market and the value of money there,” he said.

“Their assets in Afghanistan, what is going to happen? Do they move their money to a safe haven like Dubai where at least they have some stability? That is what we are finding.”

The exodus of money out of the country is “the main topic of conversation” in Kabul at present said Naseem Akbar, who heads Afghanistan’s Investment Support Agency and whose job is to lure investment, rather than stop it going out.

“The worry is about the country going into crisis, and parallel to that is that from now until 2014 we must work out how to avoid such a calamity,” he told Reuters.

A US government audit report last year found it was almost impossible to track where much of the billions of dollars spent on security and development projects in the last decade had gone given the country’s dysfunctional financial tracking system and poor bank oversight.