A positive turn around in prices and bottoming out of the market is yet to be seen, however, we expect this year to act as a catalyst towards real estate recovery as the market continues to adjust and potentially plateau over the coming years.
OFFICE MARKET
Rise in co-working and flex-space options
- We expect current and future demand in this segment to stem from the agile requirements of both corporate and SME clients.
- Consolidation and market differentiation are both to be seen as co-working/serviced office entities compete for tenants in an over-supplied office * market.
Rise in retail logistics
- With the rise in the region of Amazon, Noon, Landmark group (recently launched Dh1 bn Dubai distribution centre) and greater online market penetration, retail logistics is a burgeoning segment.
Rise of technology clients
- Globally, technology and allied sectors are the new major landlords, superseding the BFSI and service industries.
- We are also seeing rising volumes of technology clients and take-up in Dubai.
Fitting out shell and core spaces
- As most enquiry levels are for fitted/plug-and-play offices, we expect landlords to increasingly convert their shell and core assets to CAT A fit-out (raised floor and ceiling) to aid absorption.
Repurposing building use
- With some of the older stock underperforming, developers and landlords are looking at refurbishing office units or repurposing retail/mixed-use into office space to optimise weaker performing asset classes and footprint.
Grade A supply performance With over 61% of new supply coming in the Grade A segment (2018 - 2020), most of the market activity is expected to be in this segment in the next few years.
RESIDENTIAL MARKET Exo 2020
- Expo 2020 and its positive impact on jobs, tourism, retail and the overall economy, spurring residential demand
Rise in short-term rentals
- With the launch of the five-year tourism visa for all nationalities, we expect a considerable rise in short-term rentals and the holiday homes market
Payment plans
- Innovative post-handover payment plans are expected to dominate, along with heavily incentivized broker fees deployed by most developers to aid inventory absorption
Real estate committee and its impact on limiting the supply
Limited new launches
- New launch volumes were at the lowest level in 2019 compared to the last 7 years. This trend is expected to linger on as developers re-strategize future projects
Re-purposing of existing building
- Use and land use to adapt to changing market needs
Rising interest in community living
Rise in rent-to-own schemes
Rise in Proptech, access and transparency to real estate data
Potential credit check on prospective tenants
