Pent-up demand to boost UAE property sector
Abu Dhabi, January 19, 2014
A pent-up activity in the UAE real estate sector will lead to more supply in the market amid increased optimism across all business sectors, Expo 2020 win and heightened investor confidence, said a study.
With confidence returning among the investors and developers, a number of major new projects have been announced and the need of the hour is a long-term and co-ordinated approach, according to the study by Abu Dhabi-based Tasweek.
An advisor and solutions provider serving the real estate markets, Tasweek said this would result in new projects across all sectors mainly hotels, residential, retail, office and industrial.
In terms of sector-specific analysis, the hotel market will be among the strongest performing sectors, with occupancies and room rates growing, supported by strong underlying demand, said Tasweek in its review.
The residential units, both for small families and big villas, will be among the most sought-after properties in the current market environment – to cater to the increasing population across both Dubai and Abu Dhabi, the study added.
While Dubai will see increased real estate activity in specific locations such as Dubai World Central, the proposed Expo site adjacent to that, Meydan and Jumeirah, among others, in Abu Dhabi will see a wide array of mixed-use developments to cater to the increased investor demand, it added.
The pace of recovery has gathered substantial momentum in the last one year, said Tasweek in its study, adding that increased interests have been witnessed in both residential villas – up almost by nearly 25 per cent and apartments going northwards by around 20 per cent, and an upward trend in office rentals.
"The boom in various business sectors across the UAE – from trade to hospitality to tourism – is having an effect on the capital inflow and investments into the UAE, and the current boom in the real estate is real and sustainable," remarked CEO Masood Al Awar.
"Our strategy at Tasweek is aimed at driving interest and strengthening UAE’s competitive edge as a favorable investment destination in the real estate sector," he added.
Al Awar pointed out that the UAE real estate was driven by a host of factors, which include sustained growth in the UAE economy. The demand is also likely to swell on the basis of the improving economy, with heightened interests for housing – both sale and rentals.
“The population of Dubai and Abu Dhabi is on a steady increase according to analysis, and we feel this will lead to increased demand,” he added.
On specific focus sectors, the Tasweek study said there will be a number of quality retail projects undertaken across both Dubai and Abu Dhabi.
The office space will also see a number of new towers springing up, which will make it more tenant-favourable during the year. For industrial units, the strategic locations remain the south of Dubai, as well as the Kizad industrial zone associated with the Khalifa Port and the ICAD in Abu Dhabi.
Whilst supply continues to increase as major projects reach completion, vacancy rates are set to rise further and consequently rental values may stagnate, the study added.-TradeArabia News Service