Deloitte’s predictions report for the Dubai real estate sector in 2015 has been saved
Deloitte’s predictions report for the Dubai real estate sector in 2015
The report takes an in-depth look at the economy, as well as residential, hospitality, office and retail spaces in 2014 and provides outlooks for 2015.
19 April, 2015 - Deloitte Financial Advisory launched its inaugural Real Estate predictions report for the Emirate of Dubai. The report takes an in-depth look at the economy, as well as residential, hospitality, office and retail spaces in 2014 and provides outlooks for 2015.
“Dubai’s property market has experienced another year of change, with a leveling off in capital growth, in certain areas, towards the end of the calendar year. Whilst possibly not welcomed by traders and speculators, this new characteristic suggests a market that is in fact maturing and arguably strengthening. Provided growth continues at sustainable and realistic levels over the medium term, this is likely to improve end-user and investor confidence, which will have obvious benefits to the Dubai property market as a whole,” said Robin Williamson, managing director, Deloitte Corporate Finance Limited (regulated by the Dubai International Financial Center).
Deloitte’s predictions on Dubai’s residential market performance for 2015:
- Deloitte experts consider that residential transactions have slowed to a more sustainable level, reflecting the longer term trend, and predict this level of transactions to continue for the remainder of the year
- Residential sales prices in Dubai may continue to soften by 1% to 5% in H1 2015, before stabilizing in the second half of the year
- Affordability, for both nationals and expatriates, will gain more attention in 2015 and that areas such as International City and Sports City, where more amenity is planned, will continue to experience strong demand
- Overseas investors will continue to drive demand but transaction volumes may be impacted by increasing stability in Egypt and the financial and political issues affecting Russia
Deloitte’s predictions on Dubai’s hospitality market performance for 2015:
- Growth of between 7% and 9% in international overnight visitors in 2015 is realistic, driven by increasing expansion of Dubai’s tourism offer
- Occupancy and ADR levels will be broadly maintained at current levels for 2015 and growth in the Upper Upscale and Luxury Segments will be constrained by recent increases in the hotel key inventory with relatively strong growth again in the Upper Midscale and Midscale and Economy sectors, based on limited completions planned this year
Deloitte’s predictions on Dubai’s office market performance for 2015:
- Increased polarization between office areas in Dubai is predicted during 2015, as well as a greater divergence within Districts, as a result of planned supply increases and competition to attract occupiers
- A number of additional schemes will be announced during 2015 in prime locations such as DIFC where relatively strong demand was experienced in 2014; schemes which are located centrally with good access to public transport, a competitive car parking ratio, high quality specification and a range of amenities will achieve the highest occupancies and rates
- Pre-lets for office space will be more prevalent in 2015, following a period of virtually no pre-let transactions since 2009. Office schemes with reputable developers are likely to attract the most interest, as occupiers demand assurance of quality and delivery. For occupiers who are prepared to commit to pre-let agreements, there will be attractive deals available as developers compete to secure tenants with covenant strength
Deloitte’s predictions on Dubai’s retail market performance for 2015:
- Dubai’s status as a leading retail destination globally is predicted to continue to drive demand from world renowned retailers. Apple has announced that it will open a new regional store in Dubai this year, expected to be their biggest outlet in the world, and we predict additional demand from leading retailers for flagship stores, who have not yet debuted in Dubai
- Retail sales in Dubai will continue to grow. Super prime malls will experience further growth in tourist numbers whilst residents will drive demand for convenience retail and non-mall retail concepts
“Strong performance in the hospitality market in 2014 was reflected in keen investor interest. In terms of retail, The Dubai Mall welcomed a record 80 million visitors in 2014 and retailers experienced 14% growth in sales,” explains Williamson.
“These trends are expected to continue in 2015 and further support the view that Dubai is one of the most innovative and forward looking global destinations for both the hospitality and retail industry,” concluded Williamson.
To view the whole report, go to: http://bit.ly/1ziUJD6
Nadine El Hassan
Middle East Public Relations
Deloitte & Touche (M.E.)
Tel: +961 (0) 1 748444
Fax: +961 (0) 1 748999
Click here for the Arabic version
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