UAE property market remains tenant-favourable: JLL Q3 report
The residential sector recorded an increase in construction activity with around 12,000 units handed over in Dubai
Sectors across the UAE’s property market continue to be tenant-friendly in Q3 2020, according to real estate and investment management firm JLL’s Q3 UAE Real Estate Market Performance Report.
The residential sector recorded an increase in construction activity with around 12,000 units handed over in Dubai and 600 units handed over in Abu Dhabi.
Looking ahead, JLL expects developers to continue offering a range of incentives such as fee waivers, discounts, rent-to-own, as well as partnerships with banks to attract new investors and end-users looking to take advantage of the lower prices.
Dubai’s office market saw its first stock additions of the year, with a total of 190,000m2 of office gross leasable area (GLA) delivered in DIFC, Downtown Dubai, and MBR City, bringing the total stock to 8.9km2 of GLA.
Of all the completions in the commercial sector, ICD Brookfield Place in the DIFC is a notable one, as it is the first LEED Platinum commercial tower in the region. The incorporation of sustainability and health and wellness standards is expected to raise the bar for new market entrants and promote the responsible real estate agenda in Dubai and the region, the report states.
Commenting on the property market, the head of Research at JLL MENA, Dana Salbak, says: “With the ease of lockdown measures and increased mobility during the quarter, there has been a considerable increase in the level of new leasing enquiries in the office sector.
“Existing tenants also continue to either consolidate operations, seek more attractive lease terms, and, in some instances, look to relocate to quality space – a trend we are seeing across sectors in the country.”
In addition, the retail sector across Dubai and Abu Dhabi witnessed an increase in revenue share based agreements, allowing retailers to minimise risk on capital expenditure.
Although the reopening of malls has brought a gradual recovery in sales, compared to the last quarter, consumers continue to focus on essential goods rather than leisure items when it comes to spending.
In order to sustain businesses within the fast-changing market, retailers have been engaging with landlords in restructuring deals and demanding additional rent free-periods.
According to the report, the hotel sector is witnessing ongoing demand from domestic tourists, with increased appetite for beachfront hotels and private villas as residents look to capitalise on affordable luxury stays.
Going forward, the lower market segment and business hotels are expected to take time to recover as the current priority is to manage cashflow and working capital.