The Real Estate of Dubai has attracted substantial investments from all over the world before the Covid-19 disturbed them. The pandemic has adversely affected exotic residential properties but has had a significant positive effect on the sector of non-residential and industrial property.
As property prices decline, it is crucial to understand the recent market trends so that a sensible investment decision achieves better returns. Also, it is essential to take a fast decision, since prices won’t fall long, banking on the list of government initiatives such as FDI laws, restoring Qatar relations, Covid vaccinations, technological developments, co-existence laws, and especially on the next Expo 2020, which is expected to attract more than 25 million visitors at the end of 2021.
Here are the top five investment prospects for the real estate industry in 2021.
- The emergence of the non-residential sector as the biggest generator of income:
In 2019 the UAE building business generated $84.4 billion in income, according to MarketLine’s September 2020 study entitled “Construction in the United Arab Emirates.” The non-residential segment was the largest generator of revenues, with total revenues of $56.6bn, which is about 67 percent of the industry’s total value. In the coming years, the share of non-residential segments, including mixed-use, can grow to 75% in the United Arab Emirates.
- Increased demand for industrial property:
Industrial property is an apple of an eye for the commercial real estate market due to present demand and ROI. As a result of Coronavirus, internet shopping has expanded exponentially across the UAE, increasing demand for logistics. With increased incidences of Coronavirus in the UAE, internet buying has continued to grow as clients avoid personal visits.
According to Mastercard’s study in November 2020, 73 percent of UAE consumers have been shopping online more since the beginning of the Covid 19 pandemic. The report also shows that 54% of consumers spend more money on the virtual experience. The growth of online sales promotes the growth and development of the immovable industrial industry.
- Case Study Amazon Supply Chain Model:
Despite being an e-retailer, dealing with logistics has always been cheaper than using third parties. The organization’s supply chain network is virtually as extensive as significant companies such as FedEx and UPS in the Middle East. Amazon has been creating its own worldwide end-to-end logistics network, equipped with the latest cargo and trucks, and aircraft since 2015 for billions of dollars.
In the UAE, Amazon carries out most of DXB3’s client orders, the most significant fulfillment center. In 2018, DXB3 was announced to be placed in a 23,000 square meter facility in South Dubai. The facility guarantees the demand is met throughout the hectic year-end and holidays. Amazon has adopted the technique of delivering items through its final miles of services or through local courier companies known as the Delivery Service Partner Program to enhance its penetration in logistics. 3. Home II Syndrome:
There is a growing trend of foreign holiday homes among the world’s elites. Dubai has been one of the most popular locations in the Middle East for the elite to have a vacation property during recent years. In 2021 this will increase the city’s genuine rental potential to offset ownership expenses.
Secondly, the “co-primary dwelling” culture or an apartment close to the city office is also rising. As managers who have settled into luxury suburban villa communities at the outskirts of Dubai, their thinking has altered indefinitely for one year from home. Many of these managers want to explore a second home closer to the office. This will provide a significant boost for the home market in central Dubai.
- Rugged times Ahead of the commercial real estate industry because of remote work:
According to an International Workplace Group poll in 2019, before Coronavirus, the UAE had one of the lowest remote employment participation percentages. Only 10% of UAE workers reported working 1-2 days a week from home compared with a world average of 62%. However, over 40% of the UAE population works from home after Coronavirus. This has negatively harmed the commercial immobilization industry because most office buildings stay unused. In addition, real estate investors have been concerned about the safety of revenue.
- Property discounts Located in urban areas:
In 2021 residents are exodus to suburbs for more room and budget-friendly accommodation from pricey, crowded, and high-density urban areas. This will leave thousands of landlords in the dust who cannot expel unpaid renters but still bear responsibility for the maintenance and the payment of all associated bills such as taxes, insurance, and mortgage. In 2021, investors will watch the present wave of properties and buy these rental investments at a much lower rate.
The investors targeting the Dubai market are predicted to benefit from this year. Dubai Expo 2020 will substantially improve real estate investment potential.
The real-estate sector might convert this crisis into an opportunity by focusing on creating people-centered solutions which fulfill and increasingly implement the sustainability requirements established by the government of the UAE.