As shown by the recent CBRE report, office, hospitality and retail Dubai properties demonstrated great results in terms of annual rate of demand and pricing.
Thanks to a strong growing economy in the region office real estate sector of the emirate has increased from 3 to 8.5 million square meters in eight years. Another 1.1 million square meters of office space is about to be delivered between 2016 and 2018.
“Demand for good quality office accommodation across single-held towers is expected to remain firm, driven by expansion within Dubai’s private sector employment base. This will ultimately lead to further speculative office starts over the next 12 months, with activity likely to be focused on the Freezones and the CBD area,” said Matthew Green, the Head of Research & Consultancy UAE, CBRE Middle East.
According to the report, Dubai’s hospitality sector has proven to be very resilient to the challenging. During the first nine months of 2015, the Emirate welcomed 10.5 million of tourists, which is 9% more than during the same period in 2014.
“Despite the increase in visitors, year-to-date occupancy rates for the first 10 months of 2015 were down around 1 per cent at 77 per cent. Average daily rate (ADR) and revenue per available room performance have suffered more markedly, falling 7.6 per cent and 9.5 per cent respectively. This was largely attributed to increased competition amidst rising room supply, with over 6,000 new hotel and hotel apartment keys delivered during 2015,” added Green.
Approximately 22,000 rooms are expected to be delivered between 2016 and 2018.
Retail property sector has shown even better results. Here, vacancy rates across major malls are less than 2 per cent, and additional supply is planned for 2016-2018, which is about to expand the existing stock by 556,000 square meters of retail space. With the opening of new large shopping malls such as Dragon Mart 2 and the Golden Mile in 2015, the retail sector of the Dubai real estate market has increased by 8%.
“Despite the rise in supply, occupancy rates within the major centres (Dubai Mall, Mall of Emirates, Ibn Battuta Mall and Mirdif City Centre) remain exceptionally high, running at close to 100 per cent. Dubai continues to attract an ever increasing number of international brands, with the likes of Apple, All Saints, and Lulu Lemon all opening their first regional stores this year,” added Green.