Real Estate Trends 2014 for UAE

After being recovered in year 2013 market had regained its confidence. Gradual rises in asset prices were observed for both selling and rental prices. Prices were increased up to 20-30 percent. High price rises had drawn attention of Governmental authorities to design and implement regulatory initiatives to control market. New mortgage cap for local and overseas property buyers and rental caps for landlords and tenants are few important regulatory initiatives that are benefiting the whole market. However, market is showing good progress after recovery the successful bid to host EXPO 2020 further increases market sentiment. Whereas business and trade sectors also showed significant rises in activity. After observing market and investment trends Jones Lang LaSalle’s an international real estate consultancy firm has declared possible UAE real estate trends for 2014. 

EXPO 2020 win to become the host is predicted to boost up hospitality, logistics and retail sectors in long run while real estate sector is said to get benefited temporarily. Sudden rises in buying and renting prices especially around Dubai World Central which is the exhibition site for this event. 

Avoid creating another bubble

Having considered the uncertain increases in residential property prices and insecure investment practices have enabled experts to predict the danger of another property bubble. In actual market is seems to be smarter this time as investors are more concerned. Investors are not showing dependency over, pre-sales and sub-developers. Moreover, better regulation and construction of huge property developments on demand efficiently maintain new supply without creating bubble.

Mega construction projects in Dubai and Abu Dhabi

Number of mega projects has been started upon buyers demand. Most of them are huge projects that were stalled during global financial crisis. After careful planning the leading UAE emirates’ Dubai and Abu Dhabi have decided to start projects to fuel the market. Dubai Canal, Dubai Waterfront and Mohammad Bin Rashid are the few remarkable projects in year 2014. Whereas in Abu Dhabi, Yass Island, Saadiyat Island and Capital District (Zayed City) are the mega projects which are expected to be the execute demands. 

Major construction sites in year 2014

According to recently approved Dubai Urban Planning frame work, massive construction work in coming years will be clustered in south region with Dubai World Central. Upcoming projects are exhibition site for EXPO 2020 and Al Maktoum Airport. Likewise, substantial construction work is planned for central Dubai to fill out gaps amid scattered developments. Mohammed Bin Rashid City is good example of this trend. Moreover, Abu Dhabi has identified strategic locations to start mega construction projects to upgrade city’s infrastructure to execute its vision for year 2030. 

2014 is said to be less impacted by EXPO 2020 

Despite excitement and expectations associated with the mega success of EXPO 2020, 2014 will be less impacted. Limited activity is expected especially in real estate sector. On the other hand, the world event is supposed to benefit hospitality, logistics and retail in long run. To better manage excessive supply of new units careful management is required till 2020. 

New funding approach

Most preferred funding options for real estate sector in year 2014 include equity, REITs and IPOs. Pre-sales will fund residential sector whereas pre-leases and build to suit will be funding new office projects. UAE banks have become more cautious and avoid funding real estate purchases. It has been predicted that IPO’s and bond will only limited to few major investors in UAE real estate. 

Local and regional investors will be ruling investor

Total transactions of more than AED162 billion were recorded for year 2013 by Dubai Land Department. For the recent year it has been predicted that local and regional investors will be showing strong interest in investing whereas western institutional investors are expected to show less interest in investing in Dubai property. Rather they are more focused to secure income as compared to taking risks of failure. 

Significant corporate growth

Corporate sector is showing significant increase in demand of office space as most of the companies are showing their interest in investing more capitals for their business expansion. Rise in demand is expected to continue as organizations are looking for more innovative workplace solutions to transform their workplace environment. The real estate is showing little growth as compared to employment levels.  Organizations are showing remarkable interest in transforming their work place with open floor spaces and hot desking. 

Greener building trends

Being the major discussion during year 2013, green building will be the major focus of Dubai and Abu Dhabi developers. They are now focusing on sustainability while constructing commercial and residential buildings. Abu Dhabi government has enforced Estidama pearl rating for new constructions whereas in Dubai developers are required to obtain LEED certification for their project. Primary aim behind implementing these regulations to achieve sustainability certificate is to rank Dubai among ten most sustainable cities by the end of 2020.  Constructing greener buildings will be the major trend in 2014. 

Implementation of new property measurement standards

In September 2013, new international property measurement standards (IPMS) were implemented for better market regulation. Newly implemented measurement of standards efficiently aligned difference among calculations of rentable and saleable areas. Another regulatory change is which is going to be implemented in April 2014 is strict restrictions to entitle for valuation work. 

Investment in hotel sector

It is expected that hotel sector will receive huge investments this year across UAE. The hospitality sector is expected to perform strongly. Investors are willing to make huge investments after considering the enormous interest of travelers and holiday makers to visit Dubai. More sales are expected as compared to last year.

Dubai property investors with realistic approach can efficiently plan their investment strategy after considering the UAE real estate trends for year 2014. This will enable them to avoid showing unnecessary enthusiasm and help them to better maintain market without making property bubbles.

Advantages of setting up business in UAE

Two decades back UAE used to be the unrecognizable, dusty and squalid land. Later after the discovery of oil reservoirs, combined efforts of State government, developers and investors enabled this country to undergo aesthetic makeover. Significant progress has been observed in real estate and infrastructure facilities of this region.  The legacy of being an ancient trade route has been maintained well, although the old business tactics have been beautifully transformed into Western tactics. Especially the two leading Emirates Dubai and Abu Dhabi showed unmatched growth and progress in business, trade, finance and real estate sectors. The old Arab traditions efficiently blend with western cultures to present the lifestyle of 21^st century. Today UAE has become an absolute business destination in the region. Being world famous for most capable administration, infrastructure and smooth licensing process, the Middle Eastern country has almost everything to attract foreign investors and entrepreneurs.  Friendly economic and investment policies are the steps what UAE government has taken to facilitate investors and entrepreneurs.  UAE has been typified as the liberal country due to its liberal standards of rules and regulation.UAE government has taken every single step to cater foreign investors and facilitate them making huge investments in different sectors.  If you think that this is the right place to start up new business then go ahead. Below I have listed few major advantages of setting up business in UAE. 

Zero Taxes

With minimum controls and regulations by the state government, Dubai always attracts local and foreign investors.  Zero taxes on corporate profits and personal income, low custom duties and 100% repatriation of capital and profits allures everyone for making investments in UAE. Moreover, negligible controls on foreign exchange, trade quotas and stability of exchange rate between British Pound and UAE Dirham also facilitate foreign investors.  Most importantly the painless visa policies greatly facilitate expatriate to consider choosing UAE as their second home.

High Standard of Living

The high standard of living and glitz and glamour also attract everyone, who is willing to upgrade his lifestyle.  Breathtaking real estate developments like hotels, residential and commercial skyscrapers, luxury retail and recreational projects have contributed a lot in improving Dubai’s standard of living. Low crime rate, diverse culture, cosmopolitan lifestyle and availability of daily life necessities also played great role in boosting up lifestyle standards of UAE.

Structure of enterprising cost

UAE government, especially Dubai government proffers substantial cost benefits for entrepreneurs, who want to set up their enterprise in the city. It depends on the type of business you are going to establish. But in general there are some guaranteed advantages every entrepreneur will be enable to enjoy like no income taxes, corporate taxes with zero trade barriers. Moreover, you can also enjoy energy, real estate, and labour at reasonable prices. Import duties are also low with several exemptions. 

Availability of business licenses for diverse sectors

Business licenses are issued for both mainland and freezone areas across the city. Specific licensing criteria have been followed for the type of company or business setup you want to establish in UAE. For the mainland of Emirate of Dubai license are issued for different business types that include commercial trading, Tourism and travel agencies, manufacturing and processing plants, service providers and consultancy firms and branch and regional office setups.  The licensing process is simple and you can get license to become an entrepreneur in the city without doing complex paperwork.

Strong market potential

Being the business and trade hub in the region of, Middle East UAE business sector has been showing remarkably high revenues and profits in almost every sector.  The strategic location of UAE, and ease to access via air and sea routes have greatly enhance the business and trade sector in the region. Despite possessing oil reservoirs, UAE has diversified its economy to reduce its dependency from oil import and export only. Almost all emirates have been showing great interest to reduce dependency from oil exports.

UAE has successfully got itself recognized as regional business center. The country has proved its capabilities to cater entrepreneurs like no other country in the region. Dubai and Abu Dhabi are the UAE emirates that have been known to possess strong potential to serve profitable investment hubs of the Middle Eastern region.

About Abu Dhabi

Following Dubai’s footstep Abu Dhabi has successfully got it recognized as gem of Middle East. It is not only the capital Emirate of United Arab Emirate but it is also the largest UAE Emirate with biggest oil reserves. Spreading over the total area of 67,340 sq km on north-eastern part of Persian Gulf on the Arabian Peninsula, the Emirate consists of total 200 natural islands. Abu Dhabi is bordered by the Kingdoms of Oman and Saudi Arabia to east and south respectively and Dubai to the northeast. Abu Dhabi is the main Island of this Emirate whereas other important islands are Saadiyat, Al Reem, Delma and Sir Bani Yas Island. Emirate’s main Island Abu Dhabi is located just 250 Metres from mainland of UAE. Moreover, it also has an electrifying coastline of 700 Km.

Abu Dhabi is Famous for…

Abu Dhabi also possesses two fascinating oases of UAE Liwa (south-southwest of main city) and Al Ain in main city of Emirate. These oases are extremely fertile providing lush green views and good water resources. Emirate also known to possess world renowned largest and amazing sand dunes “Hajar Mountains” on its eastern region. Hajar Mountains are also known to possess huge ores of copper. The western region of capital Emirate consists of over 50 villages, whereas Zayed City is capital city of this region.

Hajar Mountains

More facts about Abu Dhabi

Abu Dhabi possesses diverse geographical landmarks other than deserts, mountains and coasts. It also has waterfalls, forest, caves, lakes and natural oases. Waterfalls can be observed on Jebel Hafeet during winter after rainfall; Jebel Hafeet mountain series also have several caves of archaeological importance. Plus Abu Dhabi has Saxaul dew forest, which is found inland to the south region of Abu Dhabi. Last but not the least Abu Dhabi displays an odd population makeup like other UAE emirates specially Dubai. UAE nationals form only a small part of 20-25% in total population of Abu Dhabi as compared to expat’s huge contribution of 75-80%.

After observing its potential to be the next business and tourism destination of UAE and Middle East, developers and investors are now focusing to build Abu Dhabi. State government is also taking interest to revamp Abu Dhabi’s image from oil producing giant to a business, finance and tourism spot of United Arab Emirate.