A fourth quarter (Q4) 2013 Dubai Real Estate Overview report was released by Jones Lang LaSalle, a leading real estate investment and advisory firm.
In summary, (residential, retail, hotel, industrial and offices). However, not all sectors performed similarly. While the residential, retail, hotel and industrial sectors witnessed strong and relatively broad-based growth, the recovery of the office sector remains more selective and concentrated in a few prime locations, with high vacancies and significant new supply depressing rental pressure elsewhere.
Summary highlights, Dubai Market Overview, Q4 2013:
The real estate investment market in Dubai saw a limited number of transactions in Q4 2013, as most sellers adopted a wait-and-see approach ahead of the results of the Expo 2020 bid. The main buyers in the Dubai market continue to be the Gulf Arabs with an increased interest in land.
The office leasing market witnessed more activity in Q4, boosted by seasonal factors as many corporates acted ahead of year end. Prime rents continue to improve as the flight to quality continues to increase demand for the best quality space. Elsewhere, average office rents have remained unchanged with increases in some projects being offset by declines in others.
The residential market ended 2013 on a strong note, with prices increasing 22% Y-o-Y on average and rents improving 17% Y-o-Y. The recovery has been broad based and evident in prime as well as secondary and more affordable locations. While further growth in rents and prices is anticipated, 2014 is expected to see a slowdown in the unsustainable levels of growth seen in 2013.
The retail market registered growth in 2013, with turnover and rents increasing in both primary malls and community based centres. Street shops have been also increasingly popular in select locations within Dubai in 2013.
The hotel sector had a very positive year with record tourist arrivals. Despite a number of notable openings, the market registered remarkable occupancy rates (Year-to-Date of 80%) and high Average Daily Rates (Year-to-Date reaching USD 241). Securing the Expo 2020 bid is expected to give an additional boost to the sector and lead to further hotel developments in 2014 and beyond.
The industrial market registered solid growth in 2013 with a number of infrastructure projects benefiting the sector. Demand continues to shift to newer areas to the south of Dubai, and this is expected to remain the case given the proximity of these areas to the Expo 2020 site.
Commenting on the report, Craig Plumb, Head of Research at Jones Lang LaSalle in MENA, said:
“2013 saw a definite improvement in sentiment and confidence towards the Dubai real estate market, culminating in the Expo 2020 decision, that provided a particular boost in the final months of the year. Sentiment and confidence are important drivers of the Dubai real estate market, but the underlying economic and demographic fundamentals have also improved in 2013.
As we move into 2014, the relatively broad based recovery is likely to continue, with increases in average prices and rentals forecast in most sectors. The pace of growth seen in late 2013 may however prove to be unsustainable, given the significant over supply and high completion levels expected in some sectors. The Dubai government has taken several measures to moderate the rapid increase in prices seen in 2013 and create more stable market conditions. These measures should help reduce some of the speculative pressures and reduce the likelihood of a significant price correction in 2014.”
 2013 Dubai Real Estate Overview report was released by Jones Lang LaSalle, a leading real estate investment and advisory firm.){kind=link}