COMMERCIAL REAL ESTATE MARKET IN UAE - GROWTH, TRENDS, AND FORECAST (2020 - 2025)

The Commercial Real Estate market in the United Arab Emirates is segmented on the basis of Type (Offices, Retail, Industrial, Logistics, Multi-family, and Hospitality) and Key Cities (Dubai, Abu Dhabi, and Sharjah)

Market Snapshot

Study Period:

2016-2025

Base Year:

2019

CAGR:

10.44 %

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Market Overview

The United Arab Emirates' GDP grew by around 2.5% in 2018. The country witnessed a decline in its real estate market over the past four years, due to lower oil prices. However, the market has been in a gradually recovering stage since 2019. The commercial real estate in the Unites Arab Emirates is also attracting strong investor attention as it is anticipated that UAE will again re establish itself as a popular property destination post Expo 2020. The investments in under-exploited asset classes are gaining popularity such as industrial; sale-and-leaseback deals through which owners sell off real estate then occupy it on a rental basis to free up capital; establishment of real estate investment trusts (Reits), and flexible office working by enterprises

There is also a strong occupier demand for for logistics space  driven by ecommerce firms and the lack of suitable existing space to serve them. The retail property is also growing at a steady pace, with the retail supply expected to increase across cities like Dubai by 111 percent over the next five years. 

The UAE's hospitality sector is also witnessing an increased demand with a rise in the agreements being signed for new hotel construction. It is expected that nearly 45,000 (hotel) rooms will come into the UAE market in the hospitality sector by 2020. 

Scope of the Report

This report aims to provide a detailed analysis of the commercial real estate market in UAE. It focuses on the market dynamics, emerging trends in the segments and regional markets, and insights on various product and application types. Also, it analyses the key players and the competitive landscape in the UAE commercial real estate market.

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Key Market Trends

Rise in Demand for Office Spaces across Dubai

The total stock of office units of Dubai currenly stands at nearly 8.7 million sq m of GLA. There was around 80,000 sq m of GLA which was added in Q3 2019 in Dubai with the completion of The Offices 4 and 5 in Trade Center District and the Mastercard building in Dubai Media City.It is expected an additional 410,000 sq m of quality office space is expected to enter the market by end of 2019 with some of the notable projects including ICD Brookfield Place in DIFC and Amesco Tower in JLT.

The majority of the demand for office units came from  small units (less than 1,000 sq m) with a preference for CAT A fit out rather than shell and core space. There are a number of new initiatives that have been launched to boost demand for the commercial real estate in Dubai such as introduction of One Free Zone Passport which allows free zone companies to extend their operations to mainland Dubai. DIFC, DWTC DAFZA and DMCC are among the free zones to have signed agreements with the Department of Economic Development to offer dual-licenses.These initiatives are likely to boost more demand for offices across the city in the upcoming years. 

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Increase in Hotel Real Estate Across Key Cities in the United Arab Emirates

The hospitality sector witnessed a significant increase in 2019 across key cities in UAE. In Dubai, around 800 new keys were added during Q3 2019, bringing the total number of hotel and serviced apartment keys to around 124,000 in Dubai. Some of the major projects completed during the quarter included Radisson Blu in Sufouh Gardens and Waldorf Astoria in DIFC. An additional 14,000 keys are expected to enter the market by the end of 2019, with major projects including The Address Fountain View in Downtown and Artesia in Damac Hills.

Since the relaxation of regulations on short-term rentals in Dubai, Holiday homes are also increasing in popularity. Seeing this opportunity, IBC Group recently announced plans to acquire 10,000 properties to furnish and manage as holiday homes in Dubai. Emaar has also entered this market with its own digital platform called “Ease by Emaar”, which will allow owners within its developments to list their properties for short-term rental.

The total stock of hotel keys in Abu Dhabi remained stable at 30,100 keys at the end of Q3 2019.  The hotel supply in Abu Dhabi is expected to reach approximately 32,500 keys by the end of 2021, with the majority of developments falling within the upper scale segment. Major future projects include Fairmont Marina, Hilton Hotel and a themed hotel on Yas Island. The Abu Dhabi Department of Culture and Tourism (ADDCT) has also launched a ‘significant events fund’ focused on attracting world-class entertainment and business events. As part of the ‘Ghadan 21’ economic programme, this fund aims to form partnerships with global entertainment organizers to invest in events in Abu Dhabi. 

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Competitive Landscape

The real estate companies in UAE are seeking to consolidate to rebuild their profits as renewed economic growth is attracting new investments. The developers are trying to bring new and lower cost products to meet the current demand. Evloving technological advacements such as new proptech solutions are driving the market in terms of increased transactions and better management of the real estate assets. Some of the major players in the UAE commercial real estate market include Nakheel properties, Deyaar, Jabal Omar, Aldar and Rak Properties. 

Table Of Contents

  1. 1. MARKET INSIGHTS

    1. 1.1 Current Economic Scenario and Consumer Sentiment

    2. 1.2 Commercial Real Estate Buying Trends - Socioeconomic and Demogpaphic Insights

    3. 1.3 Government Initatives, Regulatory Aspects for Commercial Real Estate Sector

    4. 1.4 Insights on Existing and Upcoming Projects

    5. 1.5 Insights on interest rate regime for general economy, and real estate lending

    6. 1.6 Insights on rental yields in commercial real estate segment

    7. 1.7 Insights on capital market penetration and REIT presence in commercial real estate

    8. 1.8 Insights on public-private partnerships in commercial real estate

    9. 1.9 Insights on real estate tech and startups active in real estate segment (broking, social media, facility management, property management)

  2. 2. MARKET DYNAMICS

    1. 2.1 Drivers

    2. 2.2 Restraints

    3. 2.3 Opportunities

    4. 2.4 Challenges

  3. 3. MARKET SEGMENTATION

    1. 3.1 By Type

      1. 3.1.1 Offices

      2. 3.1.2 Retail

      3. 3.1.3 Industrial

      4. 3.1.4 Logistics

      5. 3.1.5 Multi-family

      6. 3.1.6 Hospitality

    2. 3.2 By Key Cities

      1. 3.2.1 Dubai

      2. 3.2.2 Abu Dhabi

      3. 3.2.3 Sharjah

  4. 4. COMPETITIVE LANDSCAPE

    1. 4.1 Market Concentration

    2. 4.2 Company Profiles

      1. 4.2.1 Developers

        1. 4.2.1.1 Nakheel Properties

        2. 4.2.1.2 Deyaar

        3. 4.2.1.3 Jabal Omar

        4. 4.2.1.4 Aldar

        5. 4.2.1.5 RAK properties

      2. 4.2.2 Real Estate Brokerage Firms

        1. 4.2.2.1 Binayah Real Estate

        2. 4.2.2.2 Universal Properties

        3. 4.2.2.3 Bayut

        4. 4.2.2.4 Property Finder

        5. 4.2.2.5 Aston Pearl Real Estate

      3. 4.2.3 Other Companies (Real estate brokerage firms,startups, associations, etc.)

        1. 4.2.3.1 Key One Real Estate

        2. 4.2.3.2 BSO Real Estate Management

        3. 4.2.3.3 Asteco

  5. 5. FUTURE OF THE MARKET AND ANALYST RECOMMENDATIONS

  6. 6. INVESTMENT ANALYSIS

    1. 6.1 Direct Investments

    2. 6.2 Indirect Investments

  7. 7. DISCLAIMER

  8. 8. ABOUT US

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