UAE developers will stick to sustainable mode

Dubai: Property consultancy Jones Lang LaSalle spots top 10 trends for UAE’s property market:

1. Avoiding another bubble: There are many differences this time around that makes for a ‘smarter’ market. Some of these differences are that investors are more cautious, regulations are better and property development is changing, with larger projects being phased in line with demand, less reliance on pre-sales and sub-developers and significant levels of new supply being provided.

2. More measured mega-developments: The plans are more measured and there is an increased focus on phasing projects over many years in line with end-user demand.

3. Future directions of growth: Dubai is growing towards the south with Dubai World Central, which includes the Expo 2020 site and Al Maktoum Airport, driving this trend. There is also a notable trend towards development closer to central Dubai, filling some of the gaps left by the previous scattered development. This is a key aspect of the recently approved Dubai Urban Planning framework. Abu Dhabi is also following a policy of concentrating development in a number of strategic locations.

4. Expo 2020 — Important long term but limited impact in 2014. Both price expectations and excessive new supply will require careful management leading up to 2020.

5. More varied approaches to funding real estate: Rather than debt, equity will be a preferred funding approach in 2014. Pre-sales will remain important in the residential market and pre-leases and build-to-suit will be funding many new office projects.

6. Two-speed investment market: Strong interest remains from local and regional investors, with the Dubai Land Department recording total transactions of more than Dh162 billion in 2013. However, Western institutional investors are not expected to show any substantial interest in Dubai real estate in 2014.

7. Growth in corporate activity and workplace transformation: The current two-tier market is likely to continue, with the best buildings experiencing increased take-up and little demand for secondary space.

8. More investment sales in hotel sector: Hotels will continue to perform strongly. The willingness of owners to make strategic disposals will allow this interest to be converted into more sales than have been experienced in recent years.

9. Sustainability — from talk to action: There will be significant actions taken in the space. With Abu Dhabi enforcing the mandate that all new developments must achieve an Estidama pearl rating, it has achieved something of a lead in sustainability-focused projects over Dubai. However, Dubai has also announced regulations requiring new developments to be LEED certified and has declared its intention to rank among the world’s top 10 sustainable cities by 2020.

10. Improved valuation and measurement standards: Dubai became the first country to back new international property measurement standards (IPMS) in September 2013, and this should help better regulate the market in 2014. Another regulatory change that will affect the UAE market from April 1 is tighter restrictions on who is entitled to undertake valuation work.


Source: Manoj Nair, Associate Editor, gulfnews.comGN


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