View of Dubai taken from the Burj Khalifa.

Is the Middle East a perennial destination for Russia’s ‘anxious’ wealth?

Next month, Dubai’s Millennium Hotel will host the UAE-Russia Investment Forum[i], which speaks volumes about the evolving dynamics of Russian investments in the country. CEOs, investors, and industry leaders from the public and private sectors will converge to dissect the future of investments in a world shaken by geopolitical upheaval. With Russia’s business elite increasingly turning to the UAE—and the region, more broadly—the forum will address pressing challenges while spotlighting emerging opportunities for investment companies and individuals keen to navigate these volatile times and capitalize on shifting global trends.

Real estate has consistently stood out in the two countries’ investment relationship.


In the case of Russia, investment is often linked to ‘anxious wealth’—a term describing the distinct social, economic, and political uncertainty surrounding disposable income, coined by John Osburg[ii] in his study of China’s new rich, with important parallels for Russia’s elite too. While forum organizers highlight opportunities across sectors like real estate, trade, technology, tourism, and hospitality, real estate has consistently stood out in the two countries’ investment relationship. Its appeal lies in its relative simplicity, the tendency for private wealth to gravitate toward high-profile investments, and the opacity often associated with its transactions. With tales of Russians trading suitcases for real estate circulating, the Middle East has long been a favoured destination for this anxious capital.

On real estate investments, figures generally speak louder than words, and perceptions often override facts. Yet several numbers routinely do the rounds, with one figure of more than US$6 billion attributed to Russian investments in real estate in key Middle Eastern markets[iii], such as the UAE, particularly Dubai, as well as Türkiye and Egypt. Irrespective of whether such figures can be called astronomical, they surely outweigh Russian investment at other destinations.

A Swedish Institute of International Affairs Brief said that Russian migrant influx in recent years has contributed to an economic upturn in the UAE[iv], particularly in the country’s real estate sector. “Property purchases by Russians surged by 67 percent in the first three months of 2022, driving up demand for luxury villas and apartments,”[v] the Brief claims.

For this reason, Dubai’s real estate is often dubbed the barometer of Russia’s anxious wealth parked in the Middle East. An EUTAX Observatory study presented evidence on the foreign investment scale in Dubai’s residential property market. “Relying on simple assumptions to allocate new property purchases across nationalities, we conservatively estimate that Russians bought up to US$2.4 billion worth of existing properties and a further US$3.9 billion of in-development properties since the [Ukraine] invasion.”[vi] Western sanctions following Russia’s annexation of Crimea in 2014 and the invasion of Ukraine in 2022 have consolidated this flight.

The Dezan Shira and Associates Middle East report lays down the context in which these investments fructify. The study reveals that 700 Russian companies were established in the UAE in 2022[vii], increasing their number to 4,000 presently operating in the country. “With the growth in the number of Russian immigrants, the demand for the services of Russian companies in the UAE has also increased. The number of Russian real estate buyers grew incrementally, as did the number of real estate agencies set up by Russians,”[viii] the study highlighted, adding that Russians purchased real estate in the UAE for over US$500 million in 2022 alone.

Substantial ‘anxious’ Russian wealth is floating around due to political vulnerability, sanctions, external pressures, and social unease.


Reports have even emerged of Russian investors in Dubai aiming to become developers or acquiring groups of homes to create “Little Moscow” communities in the emirate.
[ix] Substantial ‘anxious’ Russian wealth is floating around due to political vulnerability, sanctions, external pressures, and social unease. It captures the uncertainty and trepidation of maintaining financial assets in a country where political and legal systems are volatile and external geopolitical factors heighten risks. When that happens, capital does not naturally linger at the source of trouble but it migrates instead where it is likely to have an uneventful hibernation period and a smooth sail as and when needed.

One can easily blame the existing political system in Russia for this flight of capital, but the same system has also created avenues for investment. Mark N. Katz, a professor of government and politics at George Mason University, attributes Russia’s solidified presence in the Middle East to the country’s focus on having “good relations with all major actors in the Middle East.”[x] While the UAE has been the destination of most such investments, burgeoning markets elsewhere in the region will likely catch fancy at some stage. Saudi Arabia’s US$1.25 trillion real estate development plan[xi] is a potential case in point.

As Prof. Katz observes, Russians have sought to “make economic gains via exports and investments to and from the region.”[xii] The country exports arms, nuclear reactors, wheat, and other agricultural products to the region and elsewhere, making enormous gains in return. Since many wealthy Russians build their fortunes through state-connected industries like oil, gas, and banking, their wealth becomes ‘anxious’ amid ongoing domestic and regional conflicts, compelling them to move funds abroad. With asset freezes, travel bans, and economic isolation continuing to threaten Russian elites elsewhere, the Middle East will remain a perennial destination, especially in real estate, for Russia’s ‘anxious’ wealth.

[i] Zawya (2024). “Dubai to host UAE-Russia Investment Forum next October”, 8 August 2024, retrieved from: https://www.zawya.com/en/press-release/events-and-conferences/dubai-to-host-uae-russia-investment-forum-next-october-g5wuiuri.
[ii] Osburg, J. (2013). Anxious Wealth: Money and Morality Among China’s New Rich, Stanford: Stanford University Press.
[iii] Acosta, C.M. and Flydal, E.F. (2024). “Russians bought up $6.3B in Dubai property after 2022 Ukraine invasion, report finds”, International Consortium of Investigative Journalists, 22 May 2024, retrieved from: https://www.icij.org/news/2024/05/russians-bought-up-6-3-billion-in-dubai-property-after-2022-ukraine-invasion-report-finds/.
[iv] Alexander, Dr K. and Malit Jr, F. (2024). “The Dynamics of ‘Geopolitical Migration’ by Russians to the United Arab Emirates”, The Swedish Institute of International Affairs, March 2024, retrieved from: https://www.ui.se/globalassets/ui.se-eng/publications/ui-publications/2024/ui-brief-no-3-2024.pdf.
[v] Ibid.
[vi] Alstadsaeter, A. et al. (2024). “Foreign investment in the Dubai housing market, 2020-2024”, EUTAX Observatory, May 2024, retrieved from: https://www.taxobservatory.eu/www-site/uploads/2024/05/Note_Foreign-investment-in-the-Dubai-housing-market.pdf.
[vii] Avdaliani, E. (2023). “UAE-Russia: 2023-24 Trade and Investment Dynamics”, Middle East Briefing.
[viii] Ibid.
[ix] Merani, M. (2023). “Russians snap up plots of land to build ‘Little Moscow’ in Dubai”, Arabian Gulf Business Insight, 20 September 2023, retrieved from: https://www.agbi.com/real-estate/2023/09/russian-investors-dubai-real-estate-little-moscow/#:~:text=Russian%20investors%20in%20Dubai%20are,European%20and%20North%20American%20markets.
[x] Katz, M.N. (2023). “Is China Displacing Russia as a Middle East Negotiator?”, 24 March 2023, retrieved from: https://katzeyeview.wordpress.com/2023/03/24/is-china-displacing-russia-as-a-middle-east-negotiator/.
[xi] Global Business Outlook (2023). “Saudi Arabia’s infrastructure projects top USD 1.25 trillion tally, affordability concerns remain”, 12 September 2023, retrieved from: https://globalbusinessoutlook.com/real-estate/saudi-arabias-infrastructure-projects-top-tally-affordability-concerns-remain/.
[xii] Middle East Insights Platform (2024). “Podcast: The Role of Russia in the Middle East with Mark N Katz”, September 2024, retrieved from: https://www.youtube.com/watch?v=ieV6-3-sn1w&ab_channel=MiddleEastInsightsPlatform.

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