Authored by Dr. Pooyan Ghamari, Swiss Economist
Dubai’s commercial real estate market has experienced substantial growth, particularly in office and retail spaces. In the first eight months of 2021, office sales surged by 132%, bringing the total leasable office area to nearly 9 million square meters. The retail sector also saw significant growth, with a 50% increase in transactions and a 94% rise in transaction value in Q2 2023, spurred by improved economic conditions, a resurgence in tourism, and favorable demographics.
The Role of Real Estate Tourism
Real estate tourism has become a pivotal factor in the commercial property market in Dubai. Luxury areas like Emirates Hills, Palm Jumeirah, and Jumeirah Bay Island accounted for a significant portion of high-value property transactions. Additionally, mortgage transactions increased by 38% in Q2 2023 compared to the previous year, highlighting growing interest in real estate investments supported by financing options.
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Economic Diversification and Its Impact
The UAE’s strategic economic diversification has played a crucial role in shaping its commercial real estate market. Government initiatives to attract international investments, allow freehold ownership, and remove profit repatriation restrictions have made the UAE an attractive destination for global investors. This increased demand has led to the development of sustainable real estate, with a focus on green buildings and renewable energy sources.
Growth in Industrial and Logistics Sectors
Dubai’s ambition to become a regional trade and logistics hub, supported by strategic infrastructure projects like the Etihad Rail, has driven demand for industrial and logistical spaces. Government policies such as long-term residency permits and 100% foreign ownership in certain sectors have further fueled growth in these areas.
Dubai’s robust infrastructure and favorable economic policies ensure the continued expansion of its commercial property sector, reinforcing its status as a global business and finance hub.
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