Dubai’s real estate market is showing signs of gradual recovery, according to data from leading property consultants JLL Mena and Knight Frank.
In its latest UAE Real Estate Market review, JLL emphasises that the UAE hotel market will continue “to experience signs of recovery”, especially with the new supply of hotel rooms in the run up to Expo 2020 Dubai.
Dubai will add an additional 12,000 keys over the second half of 2021 to cater for increased demand and the gradual return of travel following the impact of the pandemic on the hotel industry.
JLL says the city’s new supply includes a host of four-star hotels, which makes up the majority of projects that are under construction (49 per cent), along with a number of new five-star properties (37 per cent).
“The balance between four and five star hotels comes as no surprise and is in line with Dubai’s expanding tourism base,” says Dana Salbak, head of research, Mena at JLL.
She adds: “Offering more mid-segment and affordable hotel stays without compromising on quality has been a part of Dubai’s strategy to attract visitors from various destinations and comes in light of the high visitation numbers that are anticipated for Expo.”
Meanwhile, an update from Knight Frank highlights that prime headline office rents in Dubai have started to stabilise. Overall, however, rents still remain at 9-year lows, leaving occupiers firmly in the driving seat.
“The big challenge as we see it will be on how landlords and businesses will attract workers back to their desks in a meaningful way,” says Faisal Durrani, partner – head of Middle East research at Knight Frank. “We know the green agenda will be core to this and is likely to influence the real estate decisions of 9 out 12 businesses in the future, so landlords are in a way being presented with a roadmap to safeguarding future demand and therefore income.”