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The return of consumer confidence in light of easing COVID-19 restrictions and the anticipated rise in international visitors will provide some relief for the retail sector, according to JLL’s Q3 2021 Real Estate Market Overview report released today.
Driven by footfall from the population living in close proximity, the report has revealed that community malls across the UAE have been performing particularly well in the third quarter.
Additionally, some retailers in the F&B and convenience segments were able to better weather the impact of the pandemic.
“The cooler weather and the opening of Expo 2020 Dubai will see a gradual return of tourists that will provide much relief for landlords and retailers alike,” said Khawar Khan, Head of Research for the Middle East, Africa & Turkey region.
“The change in rules in September to allow the free flow of traffic between the emirates of Dubai and Abu Dhabi will also help support the UAE’s retail sector.”
In the residential market, strong demand for villas and townhouses continued to drive the recovery in villa sales prices across both Dubai and Abu Dhabi. Apartment prices have picked-up in Dubai on the back of higher demand, however they remained flat in Abu Dhabi. At a city level, residential prices in both Dubai and Abu Dhabi were up by around 4% year-on-year in Q3.
With the off-plan market starting to attract investors again, developers have started to launch projects with attractive payment plans in place to capitalise on the uptick in activity.
Over the remainder of this year, JLL expects demand for quality villa stock to underpin the recovery in sales prices.
The third quarter saw approximately 40,000 sq. m. of office space delivered in Dubai and 15,000 sq. m. in Abu Dhabi in Q3.
In Dubai, enquires from technology and e-commerce companies have been strongest as they look to expand their footprints to accommodate their growing workforces.
“Over the rest of this year, we expect further growth in new enquiries as business activity continues to rebound,” said Khan.
The UAE hotel market is also continuing its gradual recovery from the pandemic, with the luxury market taking advantage of strong leisure demand owing to the country being one of the few international destinations open for tourism.
Luxury offerings and ease of travel restrictions have helped capture demand from European source markets, however, in contrast the mid-scale and budget segments remain under pressure, awaiting the return of business travel as well as the reopening of key Asian source markets.
Expo 2020 Dubai will attract visitors to emirate over the next two quarters, with recently completed hotel projects well placed to benefit from the anticipated influx of tourists, says the report.
