Real Estate & Construction.
From The Report: Dubai 2014
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Real estate transactions in Dubai totalled $64.2bn in 2013, up sharply from $42bn in all of 2012. The residential, retail, hospitality and industrial segments all experienced solid growth. Property sales jumped by more than 20% in 2013, with serviced apartments also recording strong growth figures. Demand for Dubai property seems to be coming from all corners of the world. According to the Dubai Land Department, Indian nationals invested $2.4bn in Dubai real estate in 2012, followed by the British ($1.3bn), Pakistanis ($1.1bn), Iranians ($826m) and Russians ($640m). Regulatory changes and new loan-to-value limits for residential mortgages are being introduced to cool the market and discourage property flipping. Competition in the $1.5bn facilities management industry is set to increase as new projects come on-line.

This chapter contains an interview with Sultan Butti bin Merjen, Director-General, Dubai Land Department.

Articles from this Chapter

Overview

Solid growth: Most locations and segments are seeing price increases and expansion
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For three days in early October 2013, Cityscape Global took centre stage in Dubai’s resurgent real estate market. The annual property industry gathering is the ultimate barometer of confidence in Dubai bricks and mortar. Underscoring the strength of positive market sentiment, the 2013 event was the largest in four years, with major announcements by 11 of the emirate’s highest-profile developers. Approximately 70% of the launches were concentrated on high-end residential projects, reflecting…

Interview

OBG talks to Sultan Butti bin Mejren, Director-General, Dubai Land Department
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Interview:Sultan Butti bin Mejren What precautions can be taken to ensure that recent short-term growth in the real estate sector is not at the expense of medium-term stability? SULTAN BUTTI BIN MEJREN: The Dubai market is more mature and stable now than before the global financial crisis in 2008. The Land Department considers long-term planning crucial to its vision of making Dubai the first choice for real estate investors. Foreign direct investment, fuelled by regional and domestic demand…

Analysis

A viable alternative: Serviced apartments are showing strong demand
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Supported by increasing tourist arrivals and the opening of several branded hotel chains, Dubai’s serviced apartment segment is poised for solid growth. The depth of demand for serviced apartments – so-called because a hotel operator provides services such as house cleaning, bed-making and Wi-Fi internet access – is closely connected to the overall fortunes of the emirate’s resurgent hospitality segment. An Opportunity For individual investors, serviced apartments provide a unique opportunity…

Analysis

Limiting risk: Measures have been taken to slow down the increases in prices
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Residential real estate prices are rebounding strongly, prompting the IMF to warn in July 2013 that “action will need to be taken to prevent a bubble”. The government has since implemented a series of changes to regulations aimed at cooling the market and dampening the effects of speculation. Registration Fees Increase On October 6, 2013, the Dubai Land Department (DLD), the emirate’s property regulation and management arm, doubled the registration fee charged on real estate transactions…

Analysis

Optimising assets: Facilities management is becoming an increasingly competitive field
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The facilities management (FM) industry in Dubai has matured rapidly over the past three years, scaling up as owners and developers seek to optimise their real estate assets in an increasingly competitive market. At a total current value of around $1.5bn, the industry is expected to trend positive through 2014 on the back of a slate of new project launches and a growing awareness of the importance of life-cycle management. Companies in the FM segment typically develop and maintain services for a…

Overview

Sturdy foundations: The sector is demonstrating its resilience following the downturn
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The speculation-driven market crash saw property prices in Dubai slump by up to 65% between 2008 and 2009. Despite the shrinking amount of projects throughout the market downturn, the number of construction companies held fast at pre-crisis levels, resulting in strong competition and lower margins. Recent developments nevertheless provide cause for optimism. Construction activity that shifted to Saudi Arabia and Qatar following the crisis has returned to the UAE, and a stream of new and restarted…

Analysis

The price is right: The government is driving the development of affordable housing
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Affordable housing is a government-driven segment in Dubai. Subsidised housing is exclusively for Emiratis, and private developers eschew the low-margin segment in favour of mid- to high-end residential projects. However, market dynamics are changing on the back of Dubai’s successful Expo 2020 bid. With over 270,000 new jobs expected to support event infrastructure and development projects, demand for affordable housing is set to rise dramatically. “As a large proportion of the new workforce…