Dubai Government takes measures to stimulate real estate sector
According to JLL’s Global Real Estate Transparency Index, Dubai has retained its position as the most transparent real estate market in the region, moving up eight places in the global rankings to reach 40 out of 100 markets covered in 2018 (up from 48 in 2016). The Dubai Government recognises the importance of further improving the transparency and the quality of information available as part of its objective of increasing investment in the real estate sector.
The Arts Club, a private members club from London, has pre-leased 4,000 sq m of indoor floor space across five levels ( plus an additional 2,000 sq m outdoors) at ICD Brookfield Place, a new iconic building that is offering around 85,000 sq m and 14,000 sq m of high quality International Grade A commercial office and retail space, respectively. Located within the DIFC, this project is due to enter the market in mid-2019. The preleasing of such a significant area more than one year ahead of completion reflects the continued demand for premium quality space in the market.
The Dubai market has witnessed a major increase in off plan residential sales over the past 2 years. Data from Dubai’s Land Department (DLD), shows the total value of transactions has declined by 11% (from AED110 billion in H1 2016 to AED98 billion in H1 2018), this fall has however only applied to the established market, with the value of off-plan sales increasing. The value of established real estate transactions declined by 14% (from AED 98 billion in H1 2016 to AED 85 billion in 2018), whereas the value of off plan sales increased 17% (from AED 12 billion to AED 14 billion) over the same time period. The strength of demand for off plan properties helps explain the high level of future supply that the Dubai residential market is currently experiencing.
Dubai developers are becoming increasingly active in the retail sector across the region. Majid Al Futtaim epitomises this trend, in addition to ongoing projects in Abu Dhabi, Cairo, Muscat and Beirut, Majid Al Futtaim has become the second company to obtain a license to operate cinemas in Saudi Arabia. According to Euromonitor International, Majid Al Futtaim achieved a solid 8% growth in revenues from its retail businesses in 2017.
The month of Ramadan is usually seen as a period of weak performance for the hotel sector in the MENA region (with the exception of the Holy cities of Makkah and Madinah). However, this year Dubai was one of few markets in the region to register an increase in occupancy during Ramadan, when compared to the same period last year*. This comes despite a significant increase in the number of hotel rooms available in the market and is testament to the high demand for hotel rooms in the emirate and its diversification away from GCC and Middle Eastern feeder markets.
*16 th May – 15 th June 2018, compared to 26 th May – 24 th June 2017
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Author: Craig Plumb
Craig has over 20 years’ experience providing clients with quality advice on real estate market conditions in the UK, Asia Pacific and the Middle East. With a background in urban economics and spatial planning, he has particular expertise in the areas of property market research, development consultancy, transport related infrastructure projects and corporate real estate.
Since moving to the UAE in 2006, Craig has authored over 50 research reports on different aspects of the MENA real estate market. He has also provided market research and consulting services to major investor, developer and government clients and has appeared as an independent real estate expert before the Dubai International Arbitration Centre (DIAC).
Craig holds a Bachelor of Arts in Economics & Geography from Lancaster University and an M.Phil in Environmental Planning from Reading University (UK).