- The Impact of Tourism in the UAE Real Estate Market
OTHER CHALLENGES IN UAE REAL ESTATE MARKET
Tourism has played a significant role in the GDP of UAE ever since. In 2017, the contribution of travel and tourism to the overall GDP of the country was recorded at AED 68.5 Bn which comes out to be 5.2% of the total GDP of UAE. The market is forecasted to rise by 4.9% per annum to AED 264.5 Bn which would be 12.4% of GDP in 2027.The travel and tourism sector directly generated 317,500 jobs in the UAE which is 5.4% of total employment. This is further expected to rise by 2.4% per annum to 410,000 jobs which would be 5.9% of total employment in 2027.
- Fall in rent are creating opportunities for large space owners to lease to Co-working offices.
Due to continuous fall in the rents across the Emirate, there are numerous opportunities for large space owning landlords who are struggling to lease out their property. These spaces are now considered ideal for the co-working industry as they look to take advantage of spaces in the range of 7,000 sq ft to 50,000 sq ft within close proximity to transport, hotels and main amenities.
Based on global growth in co-working space, it is anticipated that UAE will experience an addition of co-working space between 320,000 square feet to 530,000 square feet in the upcoming years.
The success of co-working spaces stems from accommodating varied businesses; from start-ups and freelancers to blue-chip companies in the Emirate by offering flexible operating environment.
The majority of co-working space providers intends to enter into a partnership or managerial agreement with the landlords as entering in to a joint venture limits their risk in economic downturns as they are not accountable for a huge capital, which is rent.
- Government Initiatives and Regulations in the UAE Real Estate Market.
Initiatives such as the UAE central bank mortgage cap, approval of the Dubai Urban Planning Framework and consolidation of real estate players in Abu Dhabi helped towards tightening control on market conditions. While initiatives such as regulation on housing allowances for Abu Dhabi government employees, announcement of government back projects and AED 330 Billion stimulus package in Abu Dhabi stimulated real estate demand and market performance.
The government imposed a new rental decree in 2014 which allowed the rents to be increased by 5% only if they are 11% below the market rate for that area rather than 26% as determined by the RERA’s rental index. The law was applicable to private and public sector owned properties in Dubai, as well as those within the free zones.
During 2013, Dubai was named the world’s strongest housing market given the city’s status as a safe haven with improved consumer and investor confidence.
Key Segments Covered
UAE Real Estate Market
- Abu Dhabi
UAE Office Real Estate Market
- Premium Office
- Type A Office
- Type B Office
UAE Retail Real Estate Market
- Super-Regional Mall
- Regional Mall
- Community Center
- Neighborhood Center
- Convenience Center
- UAE Residential Real Estate Market
- UAE Hotel Real Estate Market
- 1-3 Star Hotels
- 4 Star Hotels
- 5 Star Hotels
- Hotel Apartments (Deluxe/Superior/ Standard)
Key Target Audience
- Real Estate Developers
- Independent Investors
- Real Estate Consulting Companies
- Third-Party Real Estate Companies
- Independent Architects
- Industry Associations
- Government Agencies
Time Period Captured in the Report:
- Historical Period – 2013 – 2018
- Forecast Period – 2019F – 2025F
Contact Ken Research:
Head Marketing and Communications