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JLL reveals 2015 top trends for UAE real estate

4th February 2015

Global property consultant JLL has outlined key trends affecting the UAE real estate market this year in its 2015 Top Trends for UAE Real Estate.

The report outlines eight crucial trends that will affect the Emirates in 2015.

2015 will see the Dubai residential bubble deflate. The overall macro-economic environment for 2015 remains relatively comfortable. In some ways this cooling of sentiment is a positive, in that it has affectively reduced the pressure on asset prices that was emerging in 2013 and the first half of 2014.

The hospitality market will face increasing challenges in 2015. The immediate trigger for the slowdown in activity is the strength of the USD, which has made Dubai relatively expensive for those coming from non-dollar dominated economies. With the value of the Ruble falling so significantly over the past six months, the number of Russian tourists to the UAE fell by 8% in October, with a much more pronounced fall expected in 2015.

Office rentals will remain stable. However, vacancy rates will remain significant despite a continued gradual improvement in the strata title market. The office market is becoming more similar to developed markets overseas.

JLL expects that varied sources of funding will be the dominator in 2015, with equity being the preferred funding approach.

2015 will see a significant but not excessive level of new supply entering the market, with 25,000 residential units, 1.2 million sqm of office space, 267,000 sqm of retail space and 4,700 hotel keys.

In Abu Dhabi, a new rental cap is likely to be implemented, marking an improvement in transparency.

JLL predicts that the recent reduction in oil prices could lead to some delays in projects, thereby easing pressure on construction costs. In addition, quality road access and public transport will have greater influence on rents and values in 2015.

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