Property/asset management big risk for real estate
Quality of management will differentiate the winners from the losers
The quality of property and asset management is of prime concern in 2011 according to organisers of the Jones Lang LaSalle ‘Top Trends for UAE Real Estate’.
Speaking at the event held at the Shangri-la Hotel in Dubai, Jesse Downs, director, management consulting, Jones Lang LaSalle said the quality of management will differentiate the winners from the losers as new buildings represent a substantial portion of total real estate in Abu Dhabi and Dubai and need professional management to maintain the capital value of assets.
"Key demand drivers are asset management, which focuses on investment returns and property management, which together with proper facilities management, aims to maximise revenues and optimise costs," she said.
Blair Hagkull, chairman, Jones Lang LaSalle MENA, said this was the third annual event looking at top trends for UAE real estate.
Craig Plumb, head of research for the company, said Dubai will see a shift towards community centres because the super sized shopping malls had reached saturation point.
“The Dubai market has got ahead of itself and there is a large supply of super regional malls. That sector of the market in Dubai is at saturation point and Abu Dhabi is reaching saturation point. There is a need for more smaller community centres. This will be a trend across the UAE," he said.
Downs added that rents across the UAE will continue to fall and there were some asset types and locations where prices and rents have stabilized, such as Dubai Marina, which will remain stable.
“Service charges and quality of management will be key issues driving the success of individual and residential projects in 2011,” she added.
“Some people think the number one risk for real estate is supply but it is management. Quality will be rewarded and poorly managed buildings will suffer more. Over the past decade, we have moved to a more mature tiered market, this will become more prevalent in 2011. Dubai has some of the youngest office space that has been completed in the last 10 years but young space requires a higher level of management and maintenance. This will determine the winners from the losers.”