The UAE's real estate sector and the overall economy have fared impressively well in Q1 2021.
Office Market
- Dubai saw over 420,000 sq. ft. of office space being handed over in Q1 2021 with an additional 340,000 sq. ft. expected over the remainder of 2021
- Dubai’s resilient economic climate and COVID-19 mitigation efforts are supporting office demand, particularly from technology, SMEs and regional occupiers along with a growing number of new market entrants.
- Office demand continues to be heavily skewed towards fitted and furnished units.
- Although over-supply issues continue and rents remain under downward pressure across the city, we foresee further segmentation in stock with an under-supply in the fully fitted and superior grade stock, particularly in the 2,000 - 3,000 sq. ft size range.
- We predict Grade B and shell and core properties to continue facing challenges in attracting occupiers and maintaining occupancy levels.
Residential Market
- Nearly 10,500 residential units came to market over Q1 2021 in Dubai. An additional 26,500 units are expected to be handed over during the remainder of 2021.
- Dubai saw a 64% increase in secondary market transaction activity over Q1 2021 vs. Q1 2020.
- Villa market significantly outperformed with a spike of over 137%, while apartments saw over a 41% increase in secondary market transaction activity over Q1 2021 vs. Q1 2020.
- Off-plan market activity continues to face headwinds, contracting by 29% over Q1 2021 vs. Q1 2020.
- Prime and established villa markets are witnessing sustained upticks for the first time since 2014 while most apartment districts continue to see price and rental softening.
