With ample choices available for tenants, landlords continue to offer incentives in order to retain current occupants – this trend is expected to continue over the next 12 months, according to the report
The government’s introduction of various regulations to stimulate demand along with the private sector’s attempts to diversify their products by adopting technologies are expected to drive the real estate market according to JLL’s Q1 Dubai Real Estate Market Overview report.
The first quarter of 2019 saw multiple commercial projects being re-commenced as developers push to deliver projects ahead of Expo 2020 Dubai. With ample choices available for tenants, landlords continue to offer incentives in order to retain current occupants – this trend is expected to continue over the next 12 months, according to the report.
In the residential space, around 9,800 units were completed in the first quarter of 2019 which is the highest number of units handed over in a single quarter for the last few years. A rising trend in the space is that of new technologies being introduced in response to the government’s call to switch to paperless transactions. Dubai Asset Management for instance is one of the first major developers to respond by rolling out Phase I of its ‘fully digital and paperless property programme’. Undertaken in partnership with Smart Dubai, this initiative allows potential tenants to complete most, if not all, steps involved in a new lease online.
The retail market shares a similar trend, with mall owners investing in new technologies such as artificial intelligence (AI) and click and collect to maintain and increase footfall. Earlier this year, Majid Al Futtaim (MAF) partnered with rapper Will.I.AM’s technology company to deploy an AI platform to engage customers and provide a digital and virtual experience for retail and entertainment. Other mall developers are expected to follow suit as the retail market continues to reinvent itself in the face of challenges particularly the growth of e-commerce.
“The overall real estate market in Dubai is maturing and looking beyond just cyclical trends. Entities are increasingly looking at innovative ways in which to re-strategise their portfolios and assets in order to boost their businesses. The government is also actively introducing regulations, such as the one allowing 100% foreign ownership of companies in the UAE to stimulate demand. These developments are expected to revive investor sentiment in the long-run.” said Craig Plumb, Head of Research, JLL MENA.
The Hotel sector is also expected to receive a boost from Dubai Tourism’s decision to release AED 250 million of bank guarantees, which will allow local tourism companies to reinvest in their businesses. This initiative is expected to help drive future growth towards the emirate’s new target of attracting 25 million overnight visitors by 2025.