UAE market awaits deals with Israel

The new relationship is an opportunity for Israeli entities to find quality UAE LPs to diversity their investor base and strengthen their ties in the region.

By MELANIE SWAN
A general view of the Dubai skyline (photo credit: MOHAMMED SALEM/REUTERS)
A general view of the Dubai skyline
(photo credit: MOHAMMED SALEM/REUTERS)
DUBAI – Weeks since news of the normalization of ties between the UAE and Israel was announced, businesses on both sides have been frantically planning and exploring investment opportunities between the two newly connected nations.
Israeli shoe chain Scoop already has signed to open five stores in the UAE, and others will soon follow.
Business opportunities are certain to benefit from the similar Sunday-Thursday working week, a one-hour time difference and three-hour direct flights.
“These types of intangibles make doing business immeasurably easier,” said David Zabinsky, a businessman from New York who has been in Dubai for more than five years.
Zabinsky is the co-founder and CEO of TRIGEM DMCC, a diamond-servicing business in the Dubai Multi Commodities Centre. He is well-connected to prominent Emirati business executives eager to explore opportunities in Israel.
“Ever since the agreement, I’ve had an influx of inquiries from those in my UAE network asking for advice on investing in Israel,” Zabinsky said.
“There is an interesting opportunity for UAE capital allocators – be they institutional investors, family offices or privates – to look at the Israeli hi-tech, healthcare and agriculture sectors as a way of diversifying their portfolios and getting exposure to high-performing spaces that had previously been inaccessible,” he said.
With a majority of the investors in Israeli companies and funds historically coming from the US and China, the new relationship is an opportunity for Israeli entities to find quality UAE-based limited partnerships to diversify their investor base and strengthen their ties in the region.
Emirati businessman Mohd Belnaqita Al Amry works in agriculture. Based in Dubai, he has an oil and wheat business in Ukraine, called Dubai Land. While some investors in the tax-free state may be deterred from taking business to Israel, for him, it is not an issue.
“In Ukraine, I pay taxes, so this isn’t even a consideration,” he said. “More important is finding the right people. Israel is very advanced in agriculture and technology, and we have a lot to learn. They’ve turned a dry land green. So for the UAE, this is a very good opportunity for growth. Not only is Israel very advanced in agriculture and technology, but in business, culture and economics.”
Emirati Ahmed Ben Omaira would like to import from Israel to the UAE and is seeking business relationships. Having grown up with a love of the Jewish people from his travels, and Israeli singers such as the late Ofra Haza and Zion Golan among his favorites, he is excited to see doors opening.
“I am looking for the right products to import and am keen to do a joint venture,” he said. “I am also keen to invest there, so [I] will be exploring opportunities now, perhaps in agriculture or technology around the issue of food and water security.”
Ben Omaira envisages a shift of investments from the business community that once invested in Turkey and tourism and believes this will benefit Israel. “We share a lot of history and culture,” he said.
But Zabinsky said it is not a one-way street. While much of the talk is about how UAE investors can get exposure to the Israeli hi-tech scene, UAE businesses and entrepreneurs should encourage Israeli entrepreneurs to set up and grow in the Emirates, where they should establish incubators, financial incentives, key B2B introductions, co-funds and more, he said.
Israel’s two largest banks are headed to the UAE this month to explore opportunities for economic cooperation. A delegation from Bank Hapoalim will travel on Tuesday to meet with banking and finance executives and with senior economic officials. Later this month, Bank Leumi will take 20 senior executives to the UAE to sign cooperation agreements with leading Emirati banks.
Dubai-based Gil Gurevich, an Israeli real-estate developer and founder of Gurevich Group, already has been helping Emiratis find personal properties in Israel and exposing the UAE property market to Israelis, who will get at least twice the value for property in the Gulf state compared which Israel, where prices are high by comparison, he said.
“They want to have homes in Jerusalem, near the holy sites, or in Tel Aviv, near the beach,” Gurevich said. “They only want the prime locations, so we are talking NIS 20 million to NIS 25m. properties and even up to NIS 100m. for the likes of top-end penthouses.”
In addition to hi-tech, talks are also underway to look at major developments, such as malls and hotels, he said.
“They’re interested in the Jewish brain,” Gurevich said.