Pent-up demand & more supply set to energize real estate sector: TASWEEK
Even as the demand surges across various components of the UAE real estate sector, driven by increased optimism across all business sectors, Expo 2020 win and heightened investor confidence, TASWEEK Real Estate Development and Marketing PJSC – an advisor and solutions provider serving the real estate markets – has forecasted a pent-up activity in the real estate sector in 2014 leading to more supply in the market.
With confidence returning among the investors and developers, a number of major new projects have been announced and the need of the hour is a long-term and coordinated approach, the TASWEEK study said. This would witness new projects in hotels, residential, retail, office and industrial, it added.
In terms of sector specific analysis the hotel market will be among the strongest performing sectors, with occupancies and room rates growing, supported by strong underlying demand. The residential units, both for small families and big villas, will be among the most sought-after properties in the current market environment – to cater to the increasing population across both Dubai and Abu Dhabi, the study said.
While Dubai will see increased real estate activity in specific locations such as Dubai World Central, the proposed Expo site adjacent to that, Meydan and Jumeirah, among others, in Abu Dhabi will see a wide array of mixed-use developments to cater to the increased investor demand, the TASWEEK study said.
The pace of recovery has gathered substantial momentum in the last one year, the study said, adding that increased interests have been witnessed in both residential villas – up almost by nearly 25% and apartments going northwards by around 20%, and an upward trend in office rentals.
Mr. Masood Al Awar, CEO of TASWEEK, said: “The boom in various business sectors across the UAE – from trade to hospitality to tourism – is having an effect on the capital inflow and investments into the UAE, and the current boom in the real estate is real and sustainable. Our strategy at TASWEEK is aimed at driving interest and strengthening UAE’s competitive edge as a favorable investment destination in the real estate sector.”
According to Mr. Al Awar, the UAE real estate is driven by a host of factors, which include sustained growth in the UAE economy. The demand is also likely to swell on the basis of the improving economy, with heightened interests for housing – both sale and rentals. “The population of Dubai and Abu Dhabi are on a steady increase according to analysis, and we feel this will lead to increased demand,” said Mr. Al Awar.
On specific focus sectors, the study added that there will be a number of quality retail projects undertaken across both Dubai and Abu Dhabi. The office space will also see a number of new towers springing up, which will make it more tenant-favourable during the year. For industrial units, the strategic locations remain the South of Dubai, as well as the KIZAD industrial zone associated with the Khalifa Port and the ICAD in Abu Dhabi.
Whilst supply continues to increase as major projects reach completion, vacancy rates are set to rise further and consequently rental values may stagnate, the study added.
TASWEEK has carved a niche as a real estate industry authority with its expertise and analytical survey of the market from time to time, which has put the organization at the forefront of real estate development in the UAE.
With its knowledge of the sector over the last four years, the company’s strategy of advocating transparency has put TASWEEK’s business model apart from the restin the regional real estate map, and it is now considered one of the most prominent and trusted real estate players in the GCC.
A recent analysis undertaken by TASWEEK showed that the UAE real estate market is set to witness amazing Return on Investments between 9% and 12% per annum.