Hotels highlight improving real estate trend in Dubai
Click here to add Chris Speller as an alert
Disable alert for Chris Speller,
Click here to add Cityscape Global as an alert
Disable alert for Cityscape Global,
Click here to add Dubai as an alert
Disable alert for Dubai,
Click here to add Jones Lang LaSalle as an alert
Disable alert for Jones Lang LaSalle,
Click here to add Jones Lang LaSalle MENA as an alert
Disable alert for Jones Lang LaSalle MENA
Dubai The hotel sector continues to be the best performer in Dubai’s real estate market as increasing tourist arrivals lead to higher occupancy and RevPAR (revenue per available room) levels, according to the latest report by Jones Lang LaSalle (JLL).
The outlook for Dubai’s residential market is mixed as the sector seems to be approaching the bottom of the property cycle. Villas, particularly in upmarket locations, are clearly performing better than apartments both in terms of rentals and sale prices. While average apartment prices and rentals have been stable over the quarter, price and rental declines are becoming more pronounced for units in middle and low income housing.
“While the hotel sector has been the major beneficiary of the Arab Spring, the retail and residential property sectors have also received a boost over the past nine months. The regional upheaval has re-enforced Dubai’s position as a global destination with many tourists rescheduling their holidays to the UAE due to volatility elsewhere in the region,” it said.
Meanwhile, Cityscape Global 2011, the premier event for the real estate industry, will open its doors today, celebrating its tenth year in Dubai.
Some 150 exhibitors from over 28 countries will be taking part besides regional real estate companies and Dubai’s Emaar, Nakheel, Dubai Properties, Damac Properties and many more.
The office market continues to become more tenant-favourable, with rentals and sale prices continuing to decline in many parts of Dubai throughout 2011, the JLL report said. Moreover, the economic scenario in Europe and the US is likely to have a negative impact on office demand from corporates as they have become more cautious and are delaying leasing decisions.
Alan Robertson, CEO of Jones Lang LaSalle Mena, said: “The Arab Spring has had a positive impact on the hotel, retail and residential sectors of the Dubai market. We believe this has helped push the hotel and retail sectors into the recovery stage and that selected sectors of the residential market are also improving. The question now is how long this impact will last before broader international issues undermine this upturn. While the Arab Spring contributed to improved sentiment and stronger performance over the first half of the year, these benefits could be limited by the fluctuating financial concerns emanating from Europe and the US over the last few months.”
The retail sector has also benefitted from the unrest with major malls reporting an increase in foot traffic and sales activity.
He added: “The ongoing political and economic stability of the UAE is likely to continue to bring in longer-term benefits for the Dubai property market.
“However a more sustainable recovery requires this upturn to be converted into broader economic activity that helps to boost employment, but there is little sign that this is happening yet.”
The Dubai office market could however get an additional impetus as high net worth individuals and investment institutions increasingly look at investment grade real estate opportunities in an environment of falling interest rates and equity markets. Properties with high occupancy and strong blue chip tenants are expected to remain in demand, commanding lower cap rates than the overall market as investors compete to purchase the limited number of investment-grade properties which offer higher returns than low interest bank deposits.
According to research by Ventures, commercial and retail sectors continue to present the areas with the most significant demand across the GCC, apart from Oman, which is predominantly residential.
Chris Speller, group director for Cityscape, said: “Cityscape has developed significantly over the past 10 years, becoming a âhousehold name’ within the real estate industry. This year we anticipate there will be a strong focus on end users and an increase in the presence of long-term investors. This year’s event will see international companies representing more than 50 per cent of the total exhibitors, an increase on 2010’s event, and Dubai’s position as an ideal bridge between Europe, Asia and Africa has secured its standing within the international business community.”
Unlike other markets in the region, affordable housing is no longer a major issue in Dubai.
Speller said: “The market outlook is much more positive now and we believe that this event will provide an excellent platform for investors, developers, regulators and service companies to come together, network and gain a greater perspective of the opportunity and focus for the real estate industry over the upcoming years.”
exhibitors from over 28 countries expected this year
forecast for international participation
- Phil Jones claims Man Utd won't repeat last year's PL slip
- TASWEEK to highlight ‘Smart Living City’ Dubai 2014 trend, other key prospects at 4th GCC- Morocco Investment Forum & Expo
- Jones Lang LaSalle releases “Top Trends for UAE Real Estate in 2012”
- Real Estate: Annual FutureBrand survey reveals only slight improvement in overall performance
- Qatar real estate market: further stabilisation expected