Real estate investment and advisory firm, Jones Lang LaSalle (JLL), has released its Q1 2017 Dubai Real Estate Market Overview report.
According to the report, the first quarter of 2017 saw a further softening in the market’s hotel and retail sectors. However, there was little change in the office and residential sectors, with some encouraging signs that the residential sector is close to the bottom of its current cycle.
Discussing the impact of the new Emirates NBD real estate investment trust (REIT) being listed on the Nasdaq Dubai exchange in Q1, JLL predicted that the launch of the REIT will help improve liquidity and enhance flexibility in the market.
The company further noted that other REITs are expected to follow this trend over time, and that with such positive ventures, investors will continue to show interest in a broader portfolio of properties.
The report reveals that vacancy rates in the office sector currently stand at 14%, and that there’s strong demand for high-quality and smart buildings. It add that technological and organisational change are on the rise and are altering workplaces, as offices are measured and analysed in more detail.
JLL stated that those changes give occupiers, developers, and investors insight into how to revaluate their future investment approach to the office sector.
Craig Plumb, head of research at JLL MENA, commented: “While we recognize that the MENA region is perhaps not directly at the forefront of revolutionising the workplace, the young, dynamic, and innovative nature of the region, especially Dubai, means its real estate markets are likely to implement and adjust to these changes rapidly over the next 20 years.”
Plumb added: “With Dubai’s real estate market showing signs of maturity and the subsequent REITs entering the market, changes are already taking place in other sectors of real estate.
“The residential market remains a favourite destination of investment among Indian investors and, according to recent data released by Dubai Land Department (DLD), investors from India have so far incurred $3.3bn(AED12bn) worth of property transactions.”
Plumb noted that while the residential market may be slowing down, the DLD figure highlights the potential the sector has in terms of future growth.
JLL also touched on the food and beverage sector in its report, calling it an important sector of the Dubai market. The company pointed out that Q1 saw the opening of the second Last Exit branch at Al Qudra lakes, a popular weekend hub for residents.
The venture is reportedly a testament to the retail sector’s movement towards the F&B market.