A widespread and clear recovery has taken place in major and secondary locations with affordable prices, while further increases in rents and prices were expected; 2014 is also expected to see a slowdown in price increases from the unsustainable levels of growth seen in 2013. The retail market recorded growth in 2013, with a shift and increase in rents in both major shopping centers and those located within residential complexes. The popularity of high-street retail stores in various locations across Dubai also increased in 2013. The hotel sector fared well this year with record numbers of tourists visiting Dubai, despite a significant number of new openings. The sector saw notable occupancy rates of 80% and an increase in the average daily rate to $241. Securing the bid to host Expo 2020 provided a boost to this sector and will lead to more projects in 2014 and beyond.
Real Estate Recovery
The industrial market recorded strong growth in 2013, driven by a number of infrastructure projects benefiting the sector. Demand continued to shift toward new areas in southern Dubai, and is expected to remain so given its proximity to the Expo 2020 site.
Commenting on the report, Craig Palmb, Head of Research at Jones Lang LaSalle Middle East, said: “2013 saw a clear improvement in sentiment and confidence toward the Dubai real estate market, which peaked following the decision to host Expo 2020, which provided significant support, particularly in the final months of the year. Confidence is a key factor in Dubai’s real estate market, but the underlying economic and demographic fundamentals also improved in 2013.
As we enter 2014, the relatively broad-based recovery is expected to continue, with average prices and rents projected to rise in most sectors; however, the pace of growth seen in late 2013 may not be sustainable.