Sustainability, adaptable spaces, flexible leases and technology adoption, which have been accelerated during the Covid-19 pandemic, are the key trends that will drive the regional property market in 2021, according to JLL, one of the world’s leading real estate investment and advisory firms.
Speaking at its annual outlook event hosted virtually in Dubai, Dana Salbak, the Head of Research at JLL Mena, said: “The year 2020 and the pandemic have reminded us of the fragility of our society and ecosystem, and have increased the focus on tech adoption, as well as, sustainability and Environmental, Social, and Corporate Governance (ESG).”
“To ensure business success, these elements must be at the heart of operating strategies and customer experience. Going forward, these themes will define the shape of the real estate recovery and of real estate investment over the coming years in the Middle East and beyond,” she stated.
JLL’s 2021 outlook for each of the sectors across Middle East’s property market include:
In 2021, office adaptations are likely to mitigate some of the reduction in demand arising from higher levels of homeworking.
In the short-term design will be all about “making do with what you have” for most corporates as cash preservation remains a top priority. However, in the long-term office adaptions are likely to drive demand for space.
“Relaxing seating densities, and collaborative spaces are likely to be a more permanent feature in a post-Covid office environment. This will mean more meeting rooms, more video/VR space, and more space dedicated to green space as well as health and wellbeing. Office design will need to factor this in and support the strategy around an all-round best-in-class employee experience,” remarked Salbak.
With the rise of the online channel, dynamics have changed and there is growing demand for more flexible leases from retailers. It also allows for quicker adaptation and sees innovative operators enter the market.
“Flexible leases can be offered in various ways, ranging from a traditional lease with more break clauses to fully fitted-out space, ready to be used by an entrepreneur, with one months’ notice or space. These formats are increasingly important for retailer and investor real estate strategies in a progressively dynamic environment,” added Salbak.
According to JLL, the trend of co-working will reboot hotels as a one-stop shop.
Large corporate occupiers will increase demand for co-working space around densely populated areas, and mobile workers will utilize touch-down points in hotels, particularly in Saudi Arabia and Egypt where long commutes are the norm, stated the expert.
“Hotels have been exploring co-working spaces as an alternative to their meeting and event space, and the focus has increased and it is expected to stay in 2021. This can help hotels significantly strengthen their branding and boost income,” added Salbak.