Sunny days ahead for investors looking to the US

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The GCC is making its mark in the US with a flurry of investments. The latest player to enter the American market is luxury developer Damac, which is planning to build a Cavalli-branded condominium in Miami.

The Dubai-based property giant announced on Friday that it had spent $120 million on a Florida beachfront plot that will have access to both South Beach and Bal Harbour. Damac has chosen to build its first US project in the upscale Miami neighbourhood of Surfside because of the city’s reputation for high-end luxury and fashion.

Foundational work has reportedly already started on the Miami tower. The developer – which is well known in the Middle East for projects such as Damac Hills, the Lagoons community in Dubai and the designer Cavalli tower that will overlook the Palm Jumeirah – hopes the project will be just the start of its foray into the US market. 

Since 2008, there has been another dimension to the foreign investment coming into the US from the Middle East. America’s EB-5 Immigrant Investor Programme allows foreign investors to fund US-based developers in order to obtain a green card for the investor, the investor’s spouse and any children under the age of 21. It is unclear whether Damac has any plans to participate in this scheme.

Over the past year, there have been significant changes to the EB-5 programme – most notably an increase in the required investment from $500,000 to $800,000.

The programme had been on hiatus since June 2021, but was reauthorised by American lawmakers this year with various changes. These include stronger security measures for investors, background checks on project principals and registration of consulting firms promoting the programme abroad – along with the extra $300,000 required. 

On March 15, US Citizenship and Immigration Services interpreted the new regulations to mean that all regional centres – administrative bodies licensed by the government to oversee projects and take on investors – must re-apply to the government for permission to operate. 

Several court cases have been brought by regional centres challenging the USCIS interpretation and claiming that re-licensing will further delay investors’ rights to apply under the programme – thereby conflicting with the ultimate purpose of the programme’s reauthorisation. The next court hearing is set for June 2 and regional centres are hoping for a ruling in their favour. 

In the meantime, processing of previous applications has already resumed. Although the price of the programme has increased, there has been no slowdown in interest. Many potential investors have been waiting patiently since the programme’s expiry last summer for an opportunity to invest and apply for US permanent residency. Once new applications are finally accepted, a rush of investors is expected. 

Preeya Malik is managing director of Step Global Group