Asian investors rethink Gulf bets as ‘safe-haven’ image takes a hit
Nikkei Asia says wealthy Asian investors are reassessing Middle East exposure after airspace closures, travel disruption and the Strait of Hormuz shutdown rattled confidence in the Gulf as a “safe haven” for capital.
Amid the turmoil triggered by joint US and Israeli strikes on Iran, investors in Asia are beginning to rethink Middle East investments, even if the region’s conflict eventually ends, Nikkei Asia reported.
Since February 28, Iran has retaliated by firing missiles and drones at multiple countries, including Bahrain, Cyprus, Iraq, Israel, Jordan, Kuwait, Qatar, Saudi Arabia and the United Arab Emirates, according to the report. The attacks prompted several countries to close their airspace, leaving tens of thousands of travellers stranded at airports.
At the same time, Iran has closed the Strait of Hormuz, a critical chokepoint for global oil and gas shipments, adding to wider market anxiety.
The conflict has erupted at a moment when many Asian businesses, major investors and family offices had been looking to the Middle East as a new growth frontier. Just two days before the US attack on Iran, the Dubai International Chamber released research showing that 46.9% of multinational companies attracted to Dubai last year came from Asia, outnumbering those from the Middle East itself.
However, experts warned that the psychological shadow of war could linger even after fighting stops.
George Chen, a partner at Washington-based consultancy The Asia Group, said bankers and lawyers in Hong Kong had received a surge of questions from wealthy clients in recent days. Some who previously relocated from Hong Kong to Dubai are now beginning to consider whether they might need to move back for safety.
“When people have seen and lived through bombings and drone attacks, fear stays with them,” he said, adding it would be difficult for the UAE to restore investor confidence quickly.
Jean-Claude Knebeler, an executive at Admiralty Asset Management in Hong Kong, told Nikkei Asia that investors should start diversifying risk. “Maybe now is the time to look for opportunities elsewhere,” he said.
He added that the UAE property market—one of the world’s strongest performers—was already expected to edge lower in 2026 as new supply comes onstream, and that the current conflict could weigh on prices, though it was too early to quantify the full impact.
Some analysts said the UAE’s reputation as a “safe haven for money” is already being tested. Yasser Elsheshtawy of the Arab Gulf States Institute in the United States pointed to the 2008–2009 financial crisis, when many foreigners left Dubai, projects stalled and property prices fell sharply—requiring years, and support from Abu Dhabi, for recovery. For Gulf cities such as Dubai—and even Riyadh—real estate is not just another sector, he noted, but a main engine of growth tied to perceptions of safety, political stability and insulation from regional conflict. “When that image is shaken, capital moves away quickly,” he said.
