The UAE is rapidly evolving into an economic powerhouse and global business hub, further cementing its reputation as a world-class retail destination, states global real estate advisory firm CBRE.
The real estate sector, in particular, is undergoing a number of key changes. With new legislation being introduced to further ease the process of conducting business in the country, digital technologies fostering efficiency and improving transparency and global economic factors influencing new trends, 2019 is set to be a year of great opportunities for the UAE’s real estate sector.
“As in any evolving market, challenges do exist in the UAE’s real estate industry; however, there are a number of key opportunities across a range of sectors in 2019. The introduction of new legislation has bolstered the strength of the industry by further supporting the UAE’s growth into a world-class business hub,” says Simon Townsend, head of strategic advisory at CBRE MENAT and general manager of CBRE KSA. “And the nation’s business friendly reputation serves to attract more international corporates to the country, whilst encouraging talented professionals to set up home and remain indefinitely in the UAE. There has been much discussions around the importance of technology in influencing property decisions and we expect to see a number of further innovations around the prop-tech space in 2019 and the efficiencies this inherently brings.”
Within the retail real estate segment, landlords will continue to optimise their tenant mix with a renewed focus on entertainment and edutainment to ensure that shopping malls become premium leisure and wellness destinations for the whole family. In addition, increasingly sophisticated data analytics will be used to offer shoppers a more experiential shopping experience at brick-and-mortar outlets.
As a number of key retail projects edge to completion and planned supply comes to market, an innovative approach to diversification and differentiation will be key to ensuring a competitive edge for new and existing retailers. While access to land will remain a challenge, opportunities do exist for investors whose clients are eager to sign longer leases.
E-commerce, on the other hand, will continue to grow with more retailers choosing to adopt an omnichannel platform to provide a more holistic brand experience that successfully integrates retailers’ online and offline propositions.
With the increase in e-commerce, and to serve the needs of the demanding customer base, more localised distribution nodes are expected to ensure a quicker delivery time to meet customer expectations. Strategic areas such as Dubai South and Dubai Investment Park will see increased activity as the popularity of online shopping and same-day delivery rises.
Within food & beverage (F&B) segment, the rise of APAC food brands will further diversify the UAE’s F&B offerings as will an increase in the number of health food concepts entering the market. The F&B industry will continue to lead the drive for large, bespoke storage and warehouse space in Dubai.
Large speculative industrial warehouse will continue to enter the market in 2019. Rental prices are expected to remain stable for both investors and companies requiring a warehouse facility.