Private equity giant Brookfield Asset Management Ltd. is setting up a new property joint venture in Dubai with Gulf consumer giant Alshaya Group, a bold bet on the city’s real estate market even as the Iran war enters its third month.

The firms will develop a 480,000-square-foot mixed-use project in the upscale Dubai Hills neighborhood, according to a statement Thursday. Brookfield Properties will serve as development and real estate manager for the venture that marks the investment firm’s first big-ticket foray into the region since the war began.