Dubai's hotel, retail and residential real estate sectors are enjoying a boost from the emirate's "safe haven" status amid unrest elsewhere in the Arab world, according to Jones Lang LaSalle's latest report "Dubai City Profile - September 2011" Monday. While the hotel sector has been the major beneficiary of the Arab Spring, the retail and residential sectors have also received a positive boost over the past 9 months. The regional upheaval has re-enforced Dubai's position as a global destination with many tourists rescheduling their holidays to the UAE due to volatility elsewhere in the region. Dubai Airport is now the fourth busiest in the world, reporting a year-on-year growth in arrivals of 9.5 percent, equating to around 12 million visitors in the first half of 2011. Alan Robertson, CEO of Jones Lang LaSalle MENA, said: "The Arab Spring has had a positive impact on the hotel, retail and residential sectors of the Dubai market. We believe this has helped push the hotel and retail sectors into the recovery stage and that selected sectors of the residential market are also improving. The question now is how long this impact will last before broader international issues undermine this upturn. While the Arab Spring contributed to improved sentiment and stronger performance over the first half of the year, these benefits could be limited by the fluctuating financial concerns emanating from Europe and the US over the last few months." He added: "The ongoing political and economic stability of the UAE is likely to continue to bring in longer term benefits for the Dubai property market. However a more sustainable recovery requires this upturn to be converted into broader economic activity that helps to boost employment, but there is little sign that this is happening yet." Tourism was particularly strong in July, with Dubai hotels achieving an average occupancy rate of 78 percent - a significant improvement on the 60 percent recorded in July 2009. This was driven by a major increase in the number of GCC nationals visiting Dubai, up 80 percent compared to the same period last year. The retail sector has also benefited from the unrest with major malls reporting an increase in foot traffic and sales activity. The residential market has also seen an increase in demand particularly from those concerned with stability and security elsewhere in the region. The outlook for Dubai's residential market is mixed as the sector seems to approach the bottom of the property cycle. Villas, particularly in upmarket locations are clearly performing better than apartments both in terms of rentals and sale prices. Whilst average apartment prices and rentals have stayed stable over the quarter, price and rental declines are becoming more pronounced for units in the middle and low income housing areas.
