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Dubai commercial real estate market booming

Dubai commercial real estate market booming article image

Dubai's commercial real estate market is one of the most important globally, having enjoyed sustained year-on-year growth for the last six years.

According to Commercial Real Estate Services (CBRE) Middle East, the office market in Dubai has almost doubled its size since 2008.

Last year it reached more than eight million square metres – bigger than the city of London’s office market, which is less than seven million square metres. 

Mr Nicholas Maclean, Managing Director of CBRE Middle East, says Dubai’s current average rental prices offer great value compared to 2008 prices and many international office markets.

In a special presentation for The Links Group, last month Mr Maclean encouraged foreign companies to consider Dubai as a Middle East hub.

The Links Group, which assists international businesses to trade in the UAE and Qatar, hosted the presentation session at the Shangri-La Hotel in Dubai.

More than 50 professionals gathered to hear about the state of Dubai's commercial real estate market.

According to The Links Group, the increase in prime office supply at more competitive rental prices is helping to attract more inward investment to Dubai with more foreign companies interested in establishing a physical presence in the emirate.

With Dubai planning to reach $300 billion in tourism and 20 million tourists under its Vision 2020 strategy, investment in the hospitality and retail sectors are now top priorities for the government. 

Lucrative market for foreign investment

According to CBRE, Dubai’s hospitality sector is expected to rise 42 percent by 2017, reaching 91,000 rooms while its retail sector is expected to increase 24 percent by 2017, reaching 2.85 million square metres.

“With strengths in tourism, logistics and transport, Dubai’s commercial real estate market is one of the most lucrative markets for foreign investment, said Simon Hobart, Group General Manager of The Links Group.

“Removing more barriers, such as foreign ownership restrictions, will make Dubai an even more attractive trade and investment destination,” Mr Hobart said.

Mr Liam Mooney, Managing Director of Blue Pencil and founder of Club Fit For Business said: “Dubai’s commercial real estate market plays a significant role in Dubai’s GDP and presents attractive opportunities for local and international investors.”

In 2003 Dubai was named the best city in the world to invest.

A survey conducted by the Reputation Institute among 18,000 international business leaders was based on investors’ trust, admiration and emotional link with the destination.

Abu Dhabi was voted second. 

The two UAE cities beat other major international cities including Zurich, Geneva, London and New York.

Investment opportunities

The results were based on which cities people are most keen on visiting, living, working and buying. 

While Venice and Paris were found to be the most popular destinations worldwide to visit, the UAE metropolis took the top spot with regards to investment opportunities.

And Last year, a study found Dubai was the best city in the world for investment returns since 2010.

The study, from Douglas Elliman and Knight Frank, looked at the return on $1 million invested in prime residential property in 2010 through the second quarter of 2014.

If you bought $1 million in real estate in New York in 2010, it would be worth about $1.22 million today. In London, it would be worth about $1.54 million. In Miami, it would be worth $1.26 million, and in Hong Kong, it would be worth $1.16 million.

The winner was Dubai with $1.63 million. 

Dubai also lead the list of major luxury cities when it comes to price growth over the past two years and three years, with prices up 29 percent and 71 percent respectively.

www.linksgroup.com

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