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Dubai real estate in recovery
Jones Lang LaSalle predicts that the Dubai real estate market is in the recovery stage—but the good news applies only to projects in prime locations.
April 15, 2013 1:38 by kippreport
For the first time since 2008, the first-quarter report from Jones Lang LaSalle has something good to report about all sectors of the Dubai real estate market.
With the REIDIN Rental Indices showing an increase of 10 percent year on year for the villa and apartment rents in Dubai – the positive trend for the residential market showed last year has continued. At the same time, the rental index is still 26 percent lower than it was in January 2009. Yet, what is important to note is that while the rents in prime locations such as the Burj Downtown, Dubai Marina and Palm Jumeirah have seen an increase in rents, secondary and less completed locations have remained stable. Still, Jones Lang LaSalle predicts rents in more established residential communities in Dubai will see an increase in rental prices for the rest of the year.
Equally interesting is the performance of the hotel supply and industry. In the first quarter of 2013 Dubai saw the increase of 500 branded rooms including Ocean View Hotel in JBR and an extension of the Ritz Carlton, also on JBR. In addition, with the delays of projects expected to be completed by the end of last year, 2013 is expected to see many more openings of hotels, including the Conrad on Sheikh Zayed Road, Sofitel on The Palm, Novotel in Al Barsha, the Oberoi in Business Bay and the Anantara Royal Amwaj on Palm Jumeirah.
Developers claim that more than one million square metres of office space could enter the market by the end of the year. While it was thought likely that this would be delayed, the office market has got off to a good start.
More than 145,000 square meters of office space entered the market this quarter with the most prominent developments including the Conrad Tower on Sheikh Zayed Road, the Grosvenor Business Tower and Iranian Business Tower in Business Bay and the S.I.T project in Silicon Oasis. Previously stalled projects like the Central Park project in DIFC and the Dubai World Trade Centre District have re-started.