JEDDAH — Dubai's property market has experienced another year of change, with a leveling off in capital growth, in certain areas, towards the end of the calendar year, Deloitte said Sunday in launching its inaugural “Real Estate Predictions Report for the Emirate of Dubai” for 2015. “While possibly not welcomed by traders and speculators, this new characteristic suggests a market that is in fact maturing and arguably strengthening,” it noted. “Provided growth continues at sustainable and realistic levels over the medium term, this is likely to improve end-user and investor confidence, which will have obvious benefits to the Dubai property market as a whole,” said Robin Williamson, managing director, Deloitte Corporate Finance Limited (regulated by the Dubai's residential market outlook: • Residential transactions have slowed to a more sustainable level, reflecting the longer -term trend, and predict this level of transactions to continue for the remainder of the year • Residential sales prices in Dubai may continue to soften by 1% to 5% in H1 2015, before stabilizing in the second half of the year • Affordability, for both nationals and expatriates, will gain more attention in 2015 and that areas such as International City and Sports City, where more amenity is planned, will continue to experience strong demand • Overseas investors will continue to drive demand but transaction volumes may be impacted by increasing stability in Egypt and the financial and political issues affecting Russia Dubai's hospitality market outlook: • Growth of between 7% and 9% in international overnight visitors in 2015 is realistic, driven by increasing expansion of Dubai's tourism offer • Occupancy and ADR levels will be broadly maintained at current levels for 2015 and growth in the Upper Upscale and Luxury Segments will be constrained by recent increases in the hotel key inventory with relatively strong growth again in the Upper Midscale and Midscale and Economy sectors, based on limited completions planned this year Dubai's office market outlook: • Increased polarization between office areas in Dubai is predicted during 2015, as well as a greater divergence within Districts, as a result of planned supply increases and competition to attract occupiers • A number of additional schemes will be announced during 2015 in prime locations such as DIFC where relatively strong demand was experienced in 2014; schemes which are located centrally with good access to public transport, a competitive car parking ratio, high quality specification and a range of amenities will achieve the highest occupancies and rates • Pre-lets for office space will be more prevalent in 2015, following a period of virtually no pre-let transactions since 2009. Office schemes with reputable developers are likely to attract the most interest, as occupiers demand assurance of quality and delivery. For occupiers who are prepared to commit to pre-let agreements, there will be attractive deals available as developers compete to secure tenants with covenant strength Dubai's retail market outlook: • Dubai's status as a leading retail destination globally is predicted to continue to drive demand from world- renowned retailers. Apple has announced that it will open a new regional store in Dubai this year, expected to be their biggest outlet in the world, and we predict additional demand from leading retailers for flagship stores, who have not yet debuted in Dubai • Retail sales in Dubai will continue to grow. Super prime malls will experience further growth in tourist numbers whilst residents will drive demand for convenience retail and non-mall retail concepts “Strong performance in the hospitality market in 2014 was reflected in keen investor interest. In terms of retail, The Dubai Mall welcomed a record 80 million visitors in 2014 and retailers experienced 14% growth in sales,” Williamson explained. “These trends are expected to continue in 2015 and further support the view that Dubai is one of the most innovative and forward looking global destinations for both the hospitality and retail industry,” he added. — SG
