Dubai’s realty sector gains momentum

The commercial real estate in Dubai has gained traction in the third quarter (July to September) of 2012. Recording robust growth in commercial leasing deals and enquiries since the beginning of the third quarter, highlights Hamptons Mena, the premier property services company. “Large investors have started to draw their attention to the UAE’s property market, in particular the Dubai commercial property market as a source of stable returns,” said Niraj Masand, Head of Operations, Hamptons Mena. “Investors are more interested in buying commercial property that is currently occupied by tenants as a source of definitive returns on their investment.” Hamptons Mena reports an increase in demand for office space in areas such as Downtown Dubai and Dubai International Financial Centre (DIFC). Among the key drivers of demand for commercial real estate are factors such as large corporations continuing to show interest in upgrading their premises with more flexibility in terms of leases, and limited new supply entering the market. Niraj Masand added: “The growth trend of the commercial sector is a strong demonstration of Dubai’s positive growth across all sectors of its economy. The city is underlining its credentials as a tourism and business hub, and this is reflected in the strong demand for commercial space.” Central business districts such as Downtown Dubai and DIFC have limited supply of single ownership space prompting companies to start looking at built to suit options. In line with global trends, occupier consolidation and portfolio optimisation remain the key focus in Dubai. Short-term annual renewable leases have been replaced with long-term leases often in excess of three years, offering more security and consistency to both the tenant and the landlord. New commercial developments such as Emaar’s Boulevard Plaza in Downtown Dubai records strong demand, according to Hamptons. High quality commercial towers such as Currency House 2 in DIFC, Emaar Square and The H Dubai Office Tower on Sheikh Zayed Road welcomed new occupiers. With restrictions on freezone businesses becoming less stringent and licensing made easier, a number of companies are taking advantage and relocating to offshore (freezone) areas. This has led to multinationals looking to rent commercial property. Earlier this year Dubai Economic Department (DED) had announced that it would implement a ‘120-days hassle-free license’ initiative, aimed to give businesses in Dubai a head start and promote the emirate’s competitiveness, by the end of 2012. The new initiative will allow investors to have their licenses issued immediately from DED depending on the risk factors of the intended business activity. This, in turn, is expected to further drive demand for commercial real estate in Dubai.