The UAE is rapidly evolving into an economic powerhouse and global business hub – whilst further cementing its reputation as a world-class retail destination. The real estate sector, in particular, is undergoing a number of key changes: With new legislation being introduced to further ease the process of conducting business in the country, digital technologies fostering efficiency and improving transparency and global economic factors influencing new trends, 2019 is set to be a year of great opportunities for the UAE’s real estate sector.
CBRE MENAT brings to you the top real estate trends that are predicted to define the industry during 2019:
Commercial
- The consolidation of office space is set to become a key trend for 2019 as an increasing number of corporates look to reduce costs and increase operational synergies.
- Wellness in the workplace continues to be a key factor for many organisations as they look to enhance the work/life balance of their employees, increase efficiency and improve their company culture.
- ‘Build to suit’ offices will rise in popularity with an increased focus on flexibility and collaborative solutions. This is particularly popular with international corporates looking to enter the Middle East market.
- 2019 will also witness a continued move towards Grade A office space, with global organisations eager to set new workplace standards and ensure the highest quality of space for their employees.
- The recent introduction of dual licensing for certain specific locations is expected to further stimulate the UAE’s real estate market whilst highlighting the strength of the UAE as a world-class location in which to conduct business.
Residential
- There will be a spike in scheduled residential supply entering the market ahead of Expo 2020 benefitting from the enhanced infrastructure, especially around the Metro expansion.
- A softening of year-on-year transaction volumes across both apartments and villa typologies is expected in 2019.
- Developers will continue to offer highly attractive payment plans and incentives, potentially leading to a rise in the number of first-time buyers or owner occupiers.
- The top five locations for future supply include Dubailand, Mohammed bin Rashid City, Dubai Creek Harbor, Jumeriah Village Circle/Triangle and Dubai South.
- Attractive ticket prices will continue to be a key strategy for developers as they aim to increase absorption rates.
Retail
- Landlords will continue to optimize their tenant mix with a renewed focus on entertainment and edutainment to ensure that malls become premium leisure and wellness destinations for the whole family.
- The rise of APAC food brands will further diversify the UAE’s F&B offerings as will an increase in the number of health food concepts entering the market.
- E-commerce will continue to grow with more retailers choosing to adopt an omnichannel platform to provide a more holistic brand experience that successfully integrates retailers’ online and offline propositions.
- Increasingly sophisticated data analytics will be used to offer shoppers a more experiential shopping experience at brick and mortar outlets.
- As a number of key retail projects edge to completion and planned supply comes to market, an innovative approach to diversification and differentiation will be key to ensuring a competitive edge for new and existing retailers.
Logistics
- Large speculative industrial warehouse will continue to enter the market in 2019.
- Access to land will remain a challenge, however opportunities do exist for investors whose clients are eager to sign longer leases.
- Strategic areas such as Dubai South and Dubai Investment Park will see increased activity as the popularity of online shopping and same day delivery rises.
- Rental prices will remain stable for both investors and companies requiring a warehouse facility.
- The food and beverage industry will continue to lead the drive for large, bespoke storage and warehouse space in Dubai.
- With the increase in e-commerce, and to serve the needs of the demanding customer base, more localized distribution nodes are expected to ensure a quicker delivery time to meet customer expectations.
Simon Townsend, Head of Strategic Advisory at CBRE MENAT and General Manager of CBRE KSA, said: “As in any evolving market, challenges do exist in the UAE’s real estate industry, however there are a number of key opportunities across a range of sectors in 2019. The introduction of new legislation has bolstered the strength of the industry by further supporting the UAE’s growth into a world-class business hub. And the nation’s business friendly reputation serves to attract more international corporates to the country, whilst encouraging talented professionals to set up home and remain indefinitely in the UAE. There has been much discussions around the importance of technology in influencing property decisions and we expect to see a number of further innovations around the prop-tech space in 2019 and the efficiencies this inherently brings.”