The United Arab Emirates is facing an enviable dilemma: Its real estate market is thriving, and there is a constant influx of buyers. According to Deloitte, Dubai rents have jumped 23% year-on-year in 2024, returning to pre-pandemic levels. Additionally, sales have increased by 18%, with this upward trend expected to continue for years to come.
This demand is even spilling over to the neighboring city of Abu Dhabi, which may be why the city’s sovereign wealth fund, Mubadala Investment Company, recently joined a $14 million Series A round raised by Dubai-based Stake. This company is bringing its fractional property investment platform to the UAE capital next year.
The Series A was primarily funded by Middle East Venture Partners, along with participation from Aramco’s Wa’ed Ventures and private investment platform Republic.
Founded in 2020 by Manar Mahmassani, Rami Tabbara, and Ricardo Brizido, Stake plans to use this new funding to fuel its international expansion. The majority of the investment will be utilized to enter Saudi Arabia in the next few months, as well as to expand to Abu Dhabi the following year. Some of the funds will also be used to offer more investment options in Dubai, such as commercial real estate. To date, the startup has raised a total of $26 million.
Backed by companies like Stake, Abu Dhabi is making strides in boosting investment in its real estate market. The Emirate has become a residential hub for individuals who work in Dubai but find the city too expensive to live in. It also aligns with Abu Dhabi’s long-term plan to diversify its revenue sources away from oil and gas production.
Stake offers a simple process for property investors. It allows individuals to purchase shares in properties it manages on behalf of shareholders and earn a portion of the monthly rentals. If the property is sold, investors receive a percentage of the profit as well. Stake also offers a secondary market called Exit Windows, where investors can sell their shares every six months.
The Stake app. Image Credits: Stake
Currently, Stake manages over 200 properties with investors from around the world. The majority of its customers are based in the UAE, with individuals from Saudi Arabia and Kuwait making up the majority of its international customer base. 12% of its customers are from the U.S., Canada, and the U.K.
Stake has been planning to expand beyond Dubai for some time. Originally, it had announced its entry into Saudi Arabia and Egypt in 2022, but plans were postponed due to economic volatility. Earlier this year, the company partnered with U.S.-based private investment platform Republic to attract more overseas investors.
To attract international investors, Stake, in partnership with the Dubai International Financial Centre (DIFC), offers investors who commit at least AED 2 million (~$545,000) a golden visa (a 10-year renewable residency visa) in Dubai. This program was introduced in 2019 to encourage foreign investment in the region, and initiatives like this have reportedly helped drive real estate investments by foreign nationals.
The company states that it typically yields a return of 4%-7% to its customers through rental income. According to co-CEO Rami Tabbara, the startup has distributed $4.5 million in rental income to customers thus far. He added that the average investment in properties through the platform is $1,500, with an average total investment of $5,600 per customer.
Expanding to Saudi Arabia
While Stake claims to have surpassed other fractional property investment platforms like Smartcrowd in Dubai, it will be starting fresh in Saudi Arabia.
In Saudi Arabia, there are already companies like Awaed and Aseel that allow customers to invest in properties through funds. Historically, only Saudi nationals have been able to have freehold ownership of properties in the country. As a result, property investment companies set up special purpose vehicles through which they enable investors to buy real estate.
“Saudi Arabia has properties worth billions that are recently completed or still in development. We plan to utilize our experience to offer a similar unified product for investment in Saudi Arabia within the same app,” stated Manar Mahmassani.
Mahmassani also noted that Stake aims to break even in Dubai by the end of this year and achieve profitability next year. The startup is also exploring partnerships that will allow people from the Middle East to invest in properties in countries like the U.S.
