2019 Outlook: UAE property will experience resilience this year
Many industries are undergoing quiet transformation as they adapt to the wave of change brought about by an evolving global economic order, digitisation, and shifting consumer trends. The property industry is a perfect example of one that is constantly advancing in response to external factors. This is particularly true of the sector in the Middle East.
2018 has witnessed the introduction of new laws that will bolster the UAE’s reputation as a world-class business hub and an economic regional powerhouse.
Legislation related to 100 percent foreign ownership, dual licensing and longer visas for highly skilled professionals working in science, research and medical fields, has reinforced the country’s commitment to developing a thriving knowledge-based economy and one of the world’s best destinations to conduct business. Landlords of commercial real estate are evolving to embrace these changes.
We have seen an increase in the consolidation of office space across the UAE in 2018 and this trend will continue as occupiers look to reduce costs and secure better or more flexible space. We have also noted an increasing level of interest from Fortune 500 clients who are enthusiastic for overseas expansion and would like to explore entering the Middle East market or grow their presence in the region.
Asia Pacific corporations are undertaking an increased level of exploratory activity in the Dubai market. Entering new markets during challenging times with honest and transparent consultancy is key. The ability to provide tailored solutions that are cost-effective, robust and evidence-based is incredibly important to new clients.
Dubai’s retail sector is highly competitive, among both occupiers and landlords. Differentiation and the introduction of omnichannel shopping experiences in the former group and flexibility with the latter group will prove the key to success for many brands.
As more malls, including the highly anticipated Meydan Mall, move closer to completion, it will be important for existing facilities to continue to innovate to provide destinations that go beyond retail and offer a wealth of entertainment, wellness and F&B experiences for the whole family. Research will be vital for many retailers.
Globally, some parts of the retail sector have been struggling to adapt to changing consumer trends and habits.
Increasingly sophisticated data analytics into the growing effect of digitisation and experiential shopping at brick and mortar outlets will be crucial in driving efficiency and enabling retailers to successfully integrate their online and offline propositions.
Saudi’s tourism sector will drive more new visitors to the region
Logistics and warehouse space will be an important sector to watch in 2019. As more international brands look to move into the UAE, sourcing high quality warehouse space – that can be customised to fit client needs – has never been more important. This past year, we have seen a strong increase in demand for storage space. Access to land remains a challenge, as does the small size of the rather opaque market. Opportunities, however, do exist in this sector particularly for investors whose clients are eager to sign longer leases. As the popularity of online shopping and same-day delivery continues, we can expect the demand for high-quality space to continue to rise especially in strategic areas such as Dubai South.
The recent changes in legislation in Saudi Arabia, including amendments to the structure of the Saudi Arabian General Investment Authority (SAGIA), accelerated investment applications (establishment of businesses) and direct property ownership for licensed companies, are sure to have a positive effect on the UAE.
Saudi’s entertainment and tourism sectors will grow rapidly, which will hopefully drive more new visitors to the region. The complimentary offerings of both countries to large corporates will likely boost their commercial real estate sectors. But the UAE in particular has proven itself adept at reacting to and initiating, new demand for real estate. And I have no doubt that this will continue in 2019.
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