Office rents in Dubai have started to plateau according to the latest from Knight Frank.

According to its biannual Dubai Office Market Review for summer 2021, 14 of Dubai’s 26 submarkets recorded no quarterly change in rents for the second quarter of 2021, indicating that office rents in Dubai are starting to stabilise. 

At the same time, however, markets indicated an occupier-driven trend, with reported office rents in Dubai correlating to levels that were last recorded in H2 2012.

TECH AND TELECOM DOMINATE NEW SPACE REQUIREMENTS

New space requirements of 203,000 square feet were recorded in the quarter, a growth of 11% from the previous quarter. Demand mainly emerged from the technology-media-telecoms (TMT) sector, which accounted for 22.1% of new space requirements. 

This highlights the growing relevance of the tech sector in Dubai, with DIFC becoming popular as a sub-market for tech startups. It also points to the overall growth of the TMT sector, which is currently seeing the fastest rate of job creation in the emirate. 

Combined with transportation and storage, the TMT sector is expected to contribute 100,000 new jobs to the UAE economy in the next five years, the report noted.

Architecture firms also contributed to demand for new space, at 19.2%, as did the hospitality sector (9.9%).

OFFICE RENTS IN DUBAI TO BE IMPACTED BY POTENTIAL UPCOMING DEMAND

The report noted that office rents in Dubai performed comparatively well in The Greens, with an annual growth of 6%, Business Bay, which grew 4%, and Dubai Media City, which gained 2%. 

While headline rents in The Greens remain 6.8% lesser than pre-pandemic levels, rents in Dubai Media City have fully recovered. Meanwhile, Business Bay reflected its first rental increase since the third quarter of 2019.

TECOM and Dubai South were amongst those to record no net annual changes, while other sub-markets recorded a net annual decrease of 1-19%.

On a quarterly basis, the outlook for office rents in Dubai looked more optimistic. Downtown Jebel Ali (+8.3%), Dubai Hills (+6.3%), The Greens (+6.1%), and Business Bay (+4.4%), showed the most gains. Growth of up to 2% was also recorded for Dubai Media City, DWTC District, Jumeirah Lake Towers, and Sheikh Zayed Road West.

In the mid to long term, Knight Frank expects that the 100% foreign company ownership law will have a key impact on office rents in Dubai. Demand for office spaces is expected to be nudged upwards, as small businesses operating in free zones look to relocate to onshore locations.

 

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The Dubai Sports Council has launched a 10-year Dubai Sports Sector Plan for the development of the sports sector in the emirate, at the fourth meeting of Dubai Sports Council’s Board of Directors

The initiative is in line with a government mandate to increase the GDP contribution of the sports sector by creating jobs, attracting investments and promoting sports tourism.

Launched under the directives of Sheikh Mansoor Bin Mohammed Bin Rashid Al Maktoum, the Dubai Sports Sector Plan focuses on enabling sports clubs and institutions in Dubai to attract talent, and win sports championships and titles.

Moreover, the Dubai Sports Sector Plan also aims to attract sports investors and entrepreneurs, and highlight Dubai as a central location for innovations and technologies, including in the field of esports and artificial intelligence.

At the meeting, directors of the Dubai Sports Council also evaluated preparations towards upcoming sports events in Dubai, such as international championships in cooperation with Expo 2020 and international sports federations.

AN INFRASTRUCTURAL PUSH FOR SPORTS UNDER THE DUBAI SPORTS SECTOR PLAN

The Dubai Sports Sector Plan aims to promote Dubai as a leading destination for major international sporting events, a home for international sports celebrities, and a headquarters base for global and regional sports federations.

This includes the headquarters of the International Olympic Committee-recognised sports federations.

Meanwhile, the initiative also looks to increase the number of local and international sports teams and athletes that are making use of sports facilities and infrastructure located in Dubai.

Another infrastructural focus of the Dubai Sports Sector Plan is to extend the number of sports academies and fitness centres in the emirate, as well as the number of sports events that take place in Dubai.

According to a Deloitte report, the sports sector has an economic impact worth USD 670 million in Dubai. Dubai is “home to world-class facilities and venues, hosting homegrown local, regional and international events,” the report stated. Non-local spectators had the most influence on the direct economic impact of the sports sector in Dubai.

Further, total expenditures related to sports in Dubai exceed USD 1.7 billion, the report stated. 57% of this expenditure was attributed to seven globally recognised annual sports events alone. 

These include the Dubai World Cup, which is the best attended single day of sport with around 80,000 spectators every year, and Emirates Airline Dubai Rugby Sevens, which recorded the highest individual attendance of over 100,000 across three days.

 

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The UK Green Building Council (UKGBC) has launched an open call for exhibition projects and a centrepiece installation for its global COP26 Built Environment Virtual Pavilion. The competition was launched alongside a coalition of more than 100 partner organisations.

The virtual pavilion is to be delivered as part of the 2021 United Nations Climate Change Conference, or COP26, to be held in Glasgow this November.

It will explore themes of sustainability and the built environment at COP26. The virtual pavilion aims to highlight how the built environment can contribute both to climate change and its solutions, including decarbonisation.

Online visitors will be able to access the pavilion through a virtual reality platform exhibiting stories, projects, films, interactive exhibits, and a centrepiece installation. 

“The launch of today’s Open Call is a very exciting moment for the COP26 Built Environment Virtual Pavilion,” Julie Hirigoyen, Chief Executive at UKGBC, said. “Each project that will be selected for the exhibition will help tell a story of sustainability in the built environment and enable those entering the virtual reality space to see just how important our industry is in the race to net zero.”

This year’s COP26 aims to evaluate progress towards the Paris Agreement and the UN Framework Convention on Climate Change. It will discuss the mitigation of the climate crisis, adaptation of ecosystems and natural habitats, mobilisation of climate finance, and collaboration between governments, businesses and society.

SPOTLIGHTING THE BUILT ENVIRONMENT FOR COP26 AT THE VIRTUAL PAVILION

The Virtual Pavilion for COP26 was announced earlier in May to “enable widespread access and engagement with built environment issues at COP26,” a statement from UKGBC said.

The open call is looking for built or planned global projects that discuss the built environment, and its relationship with the climate crisis. The projects must cover at least one of the themes at the virtual pavilion, which are, climate mitigation, climate adaptation, natural resource use, and nature and biodiversity.

In all, the virtual pavilion at COP26 aims to feature up to 12 such projects, which will also address socio-economic impacts and sustainability beyond the project’s life cycle.

These projects will be accessible to public viewing even after COP26 has ended, the UKGBC said.

It is also seeking out design proposals for a 3D virtual installation that will act as a centrepiece at the virtual pavilion. The proposals can span existing interventions, interactive spaces, and abstract art as well. The winning application will receive a prize of GBP 2000.

 

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The National Program for Coders and the Emirates Group recently launched the UAE’s first coders club, called EK Koders. The initiative is aimed at attracting the best coders worldwide, and developing a well-equipped digital community in the country.

Club members will be encouraged to participate in coding challenges, and EK Koders will also organise joint trainings and workshops in the UAE, especially for technology and aviation.

“Major international tech companies” will be participating in the initiative, Omar bin Sultan Al Olama, Minister of State for Artificial Intelligence, Digital Economy and Teleworking Applications, said.

"The National Program for Coders aims to launch a series of initiatives in collaboration with its global partners to support and encourage coders to continue innovating, develop their technological skills and knowledge, and provide a variety of workshops and supportive training programs in the field of coding,” Al Olama added.

Meanwhile, the UAE has also announced 100,000 golden visas available for coders around the world. Here’s what the UAE’s latest moves to attract coding talent to the country could mean for real estate.

SMART REAL ESTATE TRENDS

Building automation systems are gaining precedence  in the real estate industries, while developers are also looking to integrate smart functionalities for future projects. Smart buildings are growing 13% in market value every year, and are forecasted to be worth USD 19 billion in the next three years. 

Meanwhile, proptech trends ranging from virtual property viewings, to 3D architectural renderings and digital twins, are also coming to the forefront. These technology-first approaches are likely to become more prominent as the pool of coding talent grows in the country.

CODING LEADERSHIP IN RELATED INDUSTRIES

EK Koders aims to attract coders that are skilled in programming for operational improvements, and can help to build innovations in the space of aviation, travel, tourism and logistics. 

Al Olama also noted in the company statement that coding is closely related to growth in the fields of aerospace, aviation, transportation, health, education, and economy. By building a base of world-class coders, the UAE could provide these sectors, which have bearings on real estate and construction, a boost in the digital age.

SUPPORTING ENGINEERING 

Data has become an asset to real estate companies, and the construction industry is starting to move towards digitisation. The EK Koders initiative, for instance, will encompass engineering, coding, data and artificial intelligence abilities. With coding increasingly being seen as an attractive supporting skill to have, coding may no longer be just a nice-to-have for engineers.

 

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Rents have begun to pick up for Prime Central London properties, indicating that the worst may be over for London’s rental market. Earlier this year, sale prices had also shown signs of recovery.

With international students and commuters returning to London, rents for Prime Central London properties rose 1% in Q2 this year, Arabian Business reported citing data from Savills. This is the highest annual growth the market has seen since 2007, showing strong signs of recovery from a 2016 slump and the impact of the pandemic.

Rental values grew 0.4% for apartments, and 1.8% for larger houses. Experts suggest that rents for Prime Central London properties are likely to continue rising, with rental values expected to grow at 2.8%  annually until 2025.

Central London is popular as a real estate destination for investors and home buyers from the MENA region. Unable to travel to the UK, Middle East-based property owners have requested that their properties be let out to cover maintenance costs and debt, the report noted. 

Further, about 3.7% of Prime Central London properties on rent, especially those in Mayfair, St James's and Sloane Street, belong to tenants from the MENA region. 

SALE PRICES FOR PRIME CENTRAL LONDON PROPERTIES SHOWED SIGNS OF BOTTOMING OUT IN Q1

An earlier report by Savills suggested that the market had bottomed out in Q1 this year, with Prime Central London properties witnessing its first quarterly price growth since early 2020.

Sale prices for Prime Central London properties were still 20.5% below a 2014 peak, but prices rose by 0.6% in the first quarter across all parts of prime London, and 0.7% in outer prime London, where family houses were high in demand due to larger spaces and private garden areas.

South West London especially stood out, recording a growth of 1.3% for the quarter. Elsewhere, family house sales in East Sheen, Fulham, Putney, Wandsworth and Wimbledon, grew by over 1.5% during the quarter. Markets in East London also showed positive signs, but prices in Canary Wharf dropped by 2.5%.

Overall, 97 Prime Central London properties worth GBP 5 million or more were sold in the quarter, similar to sale numbers in the “post-election Boris bounce” early last year. Sale numbers were also 57% higher than that of Q1 2019.

Savills predicted that sale prices will rise further in H2 2021, before moving towards “a more sustained recovery” next year, with a growth forecast of 3% for the end of 2021, and 7% for 2022. 

 

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A concept for a spinning eco luxury floating hotel by Hayri Atak Architectural Design Studio (HAADS) has been grabbing eyeballs.

The concept for the 35,000 square meter-wide spinning hotel along Qatar’s coast is based on reducing waste and energy loss. When completed, the floating hotel will be able to generate electricity, and reuse rainwater and food waste collected at the hotel.

HAADS has worked with a number of vendors, including ship construction engineers and architects, to design the eco luxury hotel. Announced in March last year, the project is expected to be completed by 2025.

The eco luxury floating hotel has 152 suites that come with private balconies, a 700-square-metre lobby, and will also feature indoor and outdoor pools (including infinity pools), a rooftop bar, a spa, and a gym, as well as a basketball court and a mini golf course. 

The uber-luxurious floating hotel is connected to the mainland by a 140-degree floating pier, also accessible by helicopter or boat. The pier leads to three points of entry across one half of the hotel.

PUTTING THE "CEO" IN ECO LUXURY AT QATAR'S FLOATING HOTEL

The hotel acts like a giant rotating hydro-generator. The ecoluxury property will be powered by a structure similar to a dynamo. Turbines will use water current to harness tidal power to generate electricity.  

The movement of the floating hotel will be controlled by dynamic positioning, a computer-based system that can help to maintain the position and direction of propellers and thrusters, which are fitted below the waterline.

A full 360 degree spin will take about 24 hours, so visitors are less likely to feel the rotation. Further, the entire hotel is movable, and can be relocated.

The circular-shaped floating hotel has a vortex-shaped roof designed for sustainability. The roof is purposed for rainwater harvesting, and also fitted with solar panels. At the centre of the roof is a funnel-like structure that, in addition to forming the centrepiece for the hotel’s lobby, also funnels rainwater for collection.

The periphery of the eco luxury floating hotel is dotted with 55 wind turbines as well. Further, the ecoluxury project also features a wastewater treatment site, as well as a system to convert food waste into fertiliser, to be used in the green spaces around the floating hotel.

As of April this year, HAADS has been in the process of undertaking feasibility and technical tests for the eco luxury project.

_{Photo credit: www.amazingarchitecture.com/hotel/eco-floating-hotel-qatar-by-hayri-atak-architectural-design-studio-haads}

 

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The market for second homes in Dubai’s real estate market has been attracting a growing number of entrepreneurs, professionals, and small and medium enterprise owners from India, according to a recent report by Khaleej Times.

A significant portion of the total Q2 sales value of Dubai homes was driven by Indians, the report also said. 

According to the report, the quality of life in the emirate, connectivity to global business destinations, and lower rental yields (6-10%) for a cosmopolitan city have made Dubai’s real estate market an attractive destination for high net worth individuals (HNWIs) from India to purchase second homes.

“A USD 1 million worth of investments can buy significantly more real estate space in Dubai than in most other cosmopolitan cities such as Mumbai, Shanghai, London, Singapore and Monaco,” Shajai Jacob, the GCC CEO of Anarock Property Consultants, told Khaleej Times.

Moreover, the transparency and regulatory compliance measures supporting Dubai’s real estate, along with regulated supply since the COVID-19 pandemic, provide further reassurance to second home owners, the report said. Jumeirah Village Circle, Jumeirah Lake Towers, Meydan and Dubai Hills Estate especially offer lucrative entry prices and returns on investments.

DUBAI'S REAL ESTATE MARKET AS A DESTINATION FOR SECOND HOMES 

Residence by ownership is a key driver for purchasing second homes in Dubai. Last year, Indian HNWIs made the most enquiries for Dubai’s residence by ownership visas, and such enquiries are expected to grow in number this year.

Further, Indian investors flooded Dubai’s real estate market last year as flexible discounts and  post-handover payment options opened up in the emirate amidst a wide-sweeping drop in prices of properties.

The rising interest in owning second homes in Dubai is not a new trend. In 2018, Dubai’s real estate market was named a favourite among millionaires and multi-millionaires looking to purchase luxury international second homes. 

It was ranked fifth worldwide for its market for second homes for the second consecutive year, finding a place alongside New York, London, Hong Kong, and Singapore.

Further, in 2019, 16% of housing sales volume in Dubai was attributed to Indian buyers, resulting in  AED 8 billion worth of home sales. Indians have also been one of the top three nationalities to make investments in Dubai’s real estate market.

In light of the COVID-19 pandemic, new visa programs coupled with better healthcare facilities, high vaccination rates and international connectivity has led Indian investors to double their interest at the possibility of owning a second home in the emirate.

Photo credit: www.arabianbusiness.com, www.gourban.com

 

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Saudi Arabia’s Public Investment Fund (PIF) is considering pouring investments into a new international airport in Riyadh, which may serve as a base for the country’s new airline, a recent report by Bloomberg suggested.

Expecting tourist arrivals to increase sharply, the PIF had earlier also announced that it aimed to increase investments in aviation to support Saudi Arabia tourism. This includes a new airline alongside the national carrier Saudia. The new airline would focus on tourists and business travellers, whereas Saudia would cater to religious tourism, the report said.

In addition to a new airline and the possibility of a new airport, Saudi Arabia is also looking to open over 250 international aviation routes, and increase annual capacity at King Khalid International Airport and King Abdulaziz International Airport. Saudi Arabia currently has six operational airports, of which King Abdulaziz International Airport in Jeddah and King Khalid International Airport in Riyadh are the biggest. 

By 2030, the country aims to triple annual passenger traffic to 330 million.

So far, the size of the facility and the construction timeline for the new airport have not been decided, and the PIF could decide to shelve the plans altogether, the report added.

FAST-TRACKING THE DEVELOPMENT OF SAUDI ARABIA TOURISM 

As part of Vision 2030, and as a means to diversify the economy, Saudi Arabia tourism has been receiving a lot of attention from both a policy and investment level.  Three key government wings – The Ministry of Tourism, the Saudi Tourism Authority and a USD 4 billion Tourism Development Fund – have been established to help the industry reach certain benchmarks.

By 2022, Saudi Arabia tourism is expected to contribute 5.3% to the GDP, and twice that by 2030. Moreover, the country also anticipates to receive about 30 million international visitors next year, and 55 million by 2030.

Further, Saudi Arabia tourism aims to bring in investments to the tune of USD 58 billion by 2023, and over US 130 billion by 2030. The country has a number of mega-projects in the pipeline aimed at tourism, including a futuristic city called NEOM, and entertainment destination Qiddiya.

While Saudi Arabia tourism was previously restricted to religious visitors on pilgrimage, the country announced a new tourism visa regime in 2019 that would allow international tourists from 49 countries into the country. Temporarily closed due to the COVID-19 pandemic, the country is likely to restart issuing tourist visas soon.

_{Photo credit: www.arabianbusiness.com, www.naco.nl, www.argaam.com}

 

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Qatar announced this month it would add over a hundred new hotels and serviced apartments to its hospitality portfolio in the lead up to the 2022 FIFA World Cup — that is, a hundred added properties to an already beefed-up portfolio spanning 183 properties and over 32,000 rooms.

A year ago, this might have seemed risky: at the time Qatar had released a slew of fresh residential properties in anticipation of the World Cup but had seen it backfire with the outbreak of the COVID-19 pandemic. By the middle of 2020, the nation was dealing with an oversupply of more than 80,000 homes with the expected completion of 7,250 more units by the year’s end. Supply had outstripped demand so, it triggered a double-digit decline in prices.

But early this year came a reversal. Qatar went from tens of thousands of empty homes to a jump in demand. Property Finder Qatar reported a 74 per cent increase in recorded enquiries in the first quarter of 2021, when compared to the previous quarter. This surge, it said, was fuelled by lower prices, but more so by last October’s amendments to property ownership, allowing foreign investors to acquire real estate in a total nine locations instead of the earlier three.

Incidentally, it isn’t just Qatar’s residential sector that’s opening itself up to foreign investment. In April this year, the Qatari cabinet approved a bill allowing foreign investors to own up to 100 per cent of the capital of companies listed on the Qatar Stock Exchange. This, we’re told, could trigger more than USD 1 billion of overseas inflows.

The easing of pandemic-related restrictions, the roll-out of the vaccination programme, and the resumption of diplomatic ties between Qatar and its Gulf neighbours, has spurred its property market. According to the nation’s Planning and Statistics Authority (PSA), Qatar’s real estate sector saw a 63 per cent increase in the volume of sales over January and February, when compared to the same months in 2020.

GROWTH EXPECTED ACROSS QATAR REAL ESTATE SECTOR

Right now, single villa plots are the most actively traded asset class in Qatar, making up 53 per cent of all transactions, while private residential houses and apartments make up another 40 per cent. And in the residential leasing market, the World Cup has made its impact: tenants are now requesting two-year lease agreements, so their contracts might last through the duration of the World Cup.

Hotel occupancy in Qatar, though it benefitted somewhat from domestic travel, remained subdued in the first quarter of 2021. But PSA reports occupancy recovered to 66 per cent in February, which is comparable to the pre-pandemic levels recorded in February last year. This surge is expected to continue with the lifting of the blockade on Qatar, since visitors from other Gulf countries make up almost 50 per cent of the nation’s arrivals.

Meanwhile, while demand across Qatar’s office sector suffered from work-from-home (WFH) policies over the last year, with re-locations dominating leasing activity, projections have it the establishment of the Qatar Free Zone Authority will play an essential role in attracting international investment and creating new demand for office space in the months ahead.

Ultimately, agree experts, while Qatar’s real estate market is still in the grips of a period of contraction, the favourable shifts in policy, coupled with the return of diplomatic stability in the region, should engineer a period of protracted recovery and growth for Qatar’s property market in the months ahead.

 

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