Dubai-based alternative investment and PE firm EightClouds launched a UAE-focused residential investment fund targeting USD 300 mn in commitments, according to a press release (pdf). The new vehicle will focus on residential assets across Dubai and the wider UAE, aiming to build gross asset value of USD 600 mn within 10 years.

The fund received around USD 15 mn in expressions of interest, which it expects to finalize at the first closing, Oliver Wall, the firm’s head of investments, tells EnterpriseAM. The fund saw particular interest from qualified investors from the GCC and the UK, as well as other international markets, he added.

Where will the money go? The portfolio will include long-term rental properties in established, “high-demand” communities targeting yields of 9% or more, along with yields above 18% on more short-term premium units. The firm aims to expand the fund’s portfolio to around 1k units across more than 15 in-demand areas.

Investors can expect plenty of returns: The fund will pay out 100% of available cashflow to investors through quarterly dividends and offer exposure to long-term capital gains, with investors receiving 80% of realized gains.

The firm is prioritizing residential assets, viewing the segment as the most sustainable in the short to medium-term amid surging demand for rental accommodation, Wall told us. An expected population uptick in the next two years, paired with sustained economic expansion and job creation, is underpinning pricing and absorption in the market, Wall said.

The fund is primarily focused on Dubai at launch, attracted by the emirate’s deep capital pools and interest from international investors — a market which saw some USD 149 bn in residential transaction volumes last year, the investment head noted. However, the mandate is open to UAE-wide investments where yield, liquidity, and governance standards align with the fund’s underwriting criteria.

In Dubai, the fund is focusing on assets near key amenities, Wall said. For long-term rentals, it is most bullish on Dubai South, where the expansion of Al Maktoum International Airport and favorable structural trends are expected to drive sustained demand and long-term value creation. For short-term lets, the fund is keen on Downtown Dubai, with the area seeing year-round tourism and consistent corporate demand.

Normalization coming? They’re brushing it off

EightClouds sees expected price normalization in Dubai’s residential market as a healthy correction that can improve market longevity after a period of strong appreciation, Wall said. Occupancy is forecast to remain around 85% until 2030, despite a roughly 400k-unit pipeline between 2026 and 2030, pointing to continued demand across core districts.

The present challenges: Key risks to Dubai’s residential market include timing mismatches in the delivery pipeline, slower demand growth versus supply, a downturn in available liquidity, and macroeconomic volatility, according to Wall. The fund mitigates these by focusing on resilient segments, targeting high-yield communities, and diversifying across more than 15 neighborhoods.

What’s next: The fund’s first close is expected on 30 March. Looking ahead, while residential remains EightCloud’s core focus, the firm is also exploring mixed-use assets that incorporate commercial elements, Wall noted.

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