REVEALED: Key factors shaping the UAE real estate market in 2019
Real estate investment advisory firm JLL has revealed the key factors it believes will shape the UAE’s real estate market in 2019 and the emerging opportunities presented during times of uncertainty.
At JLL’s annual ‘year ahead’ event, the firm shared insight on navigating the market during a time of uncertainty as new regulations and technologies come into play and increasing opportunities in the areas of flexible office space, sale and leaseback, REITs (Real Estate Investment Trusts), and alternative real estate assets including warehouses and the logistics industry.
“Conditions softened across most sectors of the UAE real estate market in 2018.
“The prospects for 2019 will to some extent depend upon how quickly the regulatory changes enacted last year begin to generate additional demand. While market conditions are likely to remain challenging, investors and occupiers have the opportunity to introduce new strategies to enhance their performance. These include opportunities within new and emerging real estate asset classes such as flexible offices and the logistics industry, along with opportunities to increase the performance of traditional real estate assets such as hotels and retail malls,” said Craig Plumb, head of research, JLL, MENA.
“Technology will continue to be a key influence across all sectors of the UAE’s real estate market in 2019, as new solutions have the potential to drive smarter and more efficient means for predicting the market, purchasing transactions and managing assets. Proptech will continue to provide attractive investment opportunities in today’s world of smarter cities and increasing urbanization, while the digitization of assets will be increasingly seen as an essential building block in the creation of smart buildings and smart cities,” commented Thierry Delvaux, CEO of JLL MENA.
The core factors shaping investment opportunities in Dubai’s real estate market in 2019 outlined at JLL’s year ahead event included:
Rapid rise of flexible office space in Dubai
The global move towards flexible office space represents one of the biggest shifts in the real estate industry across the wider EMEA region. Dubai continues to lead the way in the MENA region with growth set to continue at a rapid pace in years ahead owing to strong demand from both tenants and landlords. In 2018 the number of co-working and serviced office space projects rose to 70 (69,000 sq m total space) from only nine (30,000 sq m) in 2010. The concept of flexible office spaces remain popular as occupiers focus on new ways of working and driving cost efficiencies.
Leveraging technology to create smarter buildings and smarter cities
Smarter cities are high on the government’s agenda with Vision 2021 now in its implementation phase. Building owners are also recognising that the digitisation of assets is an essential basis from which to create truly smart buildings that not only allow for facility managers to closely measure and monitor the technical performance of their buildings but also improve the attraction of buildings for tenants, thereby increasing their financial performance. Proptech will continue to have a profound impact across a number of areas including predictive technologies for analysing real estate, transactions across the market and providing smarter means of managing real estate.
Industrial market maturing boosting demand for specialist facilities
With the rise in e-commerce and the subsequent digitisation of the supply chain industry, there is a simultaneous surge in the demand for more specialist facilities including warehouses. The year ahead will create more opportunities and facilities in free zones housing industrial distribution centers.