Positive outlook for UAE's real estate market
Knight Frank has released its report into the UAE's real estate sector, with a positive outlook over the long-term despite a slow start to 2016. The report states that the government’s commitment to infrastructure spending and development projects will assist stronger growth forecasts, with the UAE’s safe haven status making it a favourable destination to live in, invest and visit.
With the industrial and logistics sectors being a main pillar of Dubai’s non-oil economy, the sluggish performance of global trade markets is likely to reflect on the performance of the industrial sector in the short-to-medium term. Consequently, rents are expected to remain stable as occupier demand softens. In Abu Dhabi, while demand has slowed significantly on the back of the decline in oil prices, the limited supply of quality industrial space is expected to keep the market stable.
In the long-term, the UAE’s commitment to diversifying its economy through continued investment in developing the sectors’ supporting infrastructure, such as Jebel Ali Port, and enhancing legislation is likely to boost the industry further.
The retail property market in Dubai & Abu Dhabi is expected to see slower growth levels over the second half of the year, as economic uncertainty and unfavourable currency exchange rates continue to impact both tourist and domestic spending. Knight Frank expects to witness another growth cycle for the retail market associated with growth in the hospitality and tourism industry.
Given Dubai’s position as one of the top five global cities that matter to private high net worth individuals, based on Knight Frank’s global Wealth Report, it expects the emirate to continue attracting investments both regionally and globally. However the outlook for the emirate in general and the real estate sector in particular depends on a number of global and regional fundamentals.
Read the June 2016 issue of Business Review Middle East magazine