According to the UAE real estate experts, the 3rd quarter of the year remained tenant-friendly. For the uninitiated, the sector witnessed a major blow due to the global pandemic. However, towards the end of the property updates, a V-shaped recovery had started. Now that the crippling effects of COVID-19 have reduced, there has been a notable boost in construction activity. Projects that were stalled due to the novel coronavirus are now being resumed. Due to this increase, 600 units were handed over in Abu Dhabi and 12,000 in Dubai in Q3, 2020.
Despite the market getting back to its normal self, the trend continues to stay in favor of tenants as properties for rent in UAE are available at rather reasonable rates.
Also, retail sectors in Abu Dhabi and Dubai are having restructuring deals. According to the latest property updates, projects are now signed on revenue share-based contracts. The reason why retailers are opting for agreements on these models is that it helps them to minimize risk on their capital expenditure. With the reopening of malls in the UAE, there has been a slight recovery as sales have boosted a little, particularly if compared to the 2nd quarter. However, the primary focus of consumers is on essential goods. Leisure items are still not getting as much attention as they used to get in pre-COVID times. This is majorly due to the decreased purchasing power and the uncertainty surrounding the future since coronavirus cases are again on the rise. Therefore, retailers, for the purpose of thriving in the fast-changing market, are restricting deals with their landlords.
Other than that, the office market in Dubai also saw an increase in the number of units. It was the first time in the year 2020 that new additions have been made to the office stock. Office Gross Leasable Area (GLA) with a total area of 190,000 sq. m. has been delivered in prominent residential communities in Dubai; MBR City, DIFC and Downtown Dubai. With this new addition, the total stock of GLA has reached 8.9 sq. m.
Experts also believe that property developers are also keen on improving health and wellness standards in their projects. Furthermore, they are also adding the element of sustainability. This is expected to raise the standard of construction in the region, particularly for new entrants in the market. The ultimate result will be improved real estate principles. Newly launched projects with improved sustainability and construction principles will help to gain more attention from people looking to buy off-plan properties in the region.
As per property experts in the UAE, despite things almost getting back to normal, it will still take some time for real estate rates to be on the same levels as they were before COVID-19. Developers, too, will continue to offer various incentives such as discounts, fee waivers, rent-to-own schemes etc. to attract buyers and investors. Rents, as stated above, are also expected to remain on the lower side. This makes for a lucrative opportunity for those looking to buy a property in the UAE. Also, those who want to get a property for rent in Dubai and other emirates can find abundant options in various communities.
Zoom property updates also include the hotel industry ranked among the major sectors that suffered the most during the lockdown and travel restrictions. However, now that travel restrictions have been eased and major tourist spots reopened, there has been a noted activity in this sector. Private villas and waterfront properties like Stella Maris in Dubai Marina, in particular, are getting more attention. Having said that, it is to be noted that most of the sales in this sector are being driven by domestic tourists.