Friday 12 July 2024

UAE developers 'shifting focus to mid-market projects'

DUBAI, January 31, 2018

As population growth, urbanisation and tourism continue, the UAE is facing growing pressure to accommodate the evolving needs of both nationals and expatriates. This includes the need for more good quality, affordable options for middle-income individuals and households, said a report by top global architecture firm, Perkins+Will.

Around 20 per cent of adults in the UAE accounted for ‘bottom-income’ while ‘top-income’ residents formed 32 per cent of the country's adult population, leaving a growing middle-income group of 48 per cent, stated the design expert citing the Euromonitor International data in 2017.

Identifying the inclusion of middle-income market development projects as a key trend for 2018, Roger Wilson, the managing director at Perkins+Will’s Dubai studio, said: "This year will continue to see the high-end luxury developments for which the UAE is renowned, but developers will be looking to deliver more investment and leisure opportunities catering to the middle-income market."

"This trend emerging in the market primarily encapsulates the residential and hospitality sectors. It’s important to make clear this growth area will not supplant existing high-end projects, it is simply evolving to include a previously underserved market," he added.

According to Wilson, the residential developers will increasingly target mid-income investors with one-bed and studios around the Dh500,000 to Dh600,000 ($136,116 to $163,339) mark.

"A similar focus is also predicted in hospitality, where operators see a need to cater to a wider range of price points for travellers who visit the region. We expect to see the gap between luxury travellers and those travelling for experiential purposes increasingly satisfied in the coming year, with an increase in three and four-star properties," he stated.

"That said, we have not experienced a decline in our pipeline of top-end developments so hospitality will remain strong, especially across branded residential and resort developments," he added.
"The hotel construction contracts awarded during 2018 are expected to reach $14 billion, with the UAE being the largest market for these contracts, so growth here is inevitable for us," said Wilson, citing Meed Projects data.

He said the number of travellers is continuing to increase, with a continued consolidation of Dubai’s role as the leisure capital of the region.

"While budget travel continues to grow and is increasingly catered for by airlines, exclusivity is also being redefined. Airports are working to fill the need for exclusivity and privacy with new travel classes, higher specification lounges and faster immigration and baggage processing systems," explained Wilson.

"We definitely expect to see a move toward an increasingly passenger-framed experience. We are looking at some key aviation terminal projects next year which will encapsulate these new requirements. It’s an interesting time for this space," he added.

Wilson pointed out that though there has been a shift towards the inclusion of this uprising of a mid-income market, the UAE retains its affluent demographic.

"It is not a shift from one to the other, but an expansion to respond to an emerging demographic, one which indicates a maturing of the economy. We still retain a high number of ‘luxury’ projects in next year’s pipeline," he added.-TradeArabia News Service

Tags: UAE | Developers | architecture | Projects | Perkins+Will |

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