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Mazaya Monthly Real Estate Report -
Week 4 - October 2015
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Al-Mazaya Holdings Weekly Real-Estate
Report points out commercial real estate
has performed relatively strongly in the
UAE in 2015, especially when compared
to the residential market. This is thanks
in no short measure to the diversified
nature of Dubai’s economy, which means
the effect of the weakening oil price is
not felt so keenly as it is in other parts of
the region, and also because Dubai and
Abu Dhabi are seen as two of the most
transparent and easy places in the Gulf in
which to do business. They are attractive
places for foreign businesses to set up,
a factor that supports the commercial
real estate market considerably. Dubai
Land Department statistics show some
AED106bn of commercial real estate
transactions took place in H1, 2015.
Other factors underpinning the vitality
of the commercial real estate sector
in Dubai include the success of the
emirate-wide metro and the winning
of the World Expo 2020 bid, which will
bring many millions of extra business
travellerstoDubaiintheyearsleadingup
to the event, and, conceivably, beyond.
Al-Mazaya Holdings Weekly Real-
Estate Report points out that over the
coming months the Gulf markets will
feel the squeeze of lower oil prices
as government spending plans are
announced that show more cautious
state expenditure than in previous
years when oil prices were stronger.
It is important, therefore, that both the
residential and commercial segments
of the real estate sector throughout
the Gulf region do all they can to
impress upon investors that they are
solid investment options capable of
withstanding a downturn in economic
sentiment, whether regional or global. It
is a significant challenge, but managed
correctly, a not insurmountable one.
While returns on commercial real estate
continue to present better value than
those on most residential asset classes,
it is not surprising that investors remain
keen to put their money into commercial
ventures in the Gulf. We epect this year to
see most commercial real estate investors
enjoy returns around the fifteen percent
market in the region, which is a healthy
and attractive figure. It is important,
though, that governments continue to
monitor the market closely in order to be
able to provide investors with accurate
information in a transparent manner.