“2012 ended with a flurry of new project announcements as increased confidence has returned towards real estate. While there has been a recovery in rents and prices in the residential, retail and hotel sectors during 2012, this improvement remains focused on a relatively small number of projects. As we move into the New Year with renewed optimism, we are likely to see a broader based recovery in 2013 but this recovery will remain challenged by the current over supply and high vacancy levels. The recent UAE Central Bank announcement about caps on mortgage loan-to-value ratios shows that government authorities are concerned about market stability and want to avoid any rapid increase in real estate prices,” Craig Plumb, Head of Research at Jones Lang LaSalle in MENA said.
For the first time our report includes commentary on Dubai’s industrial sector reflecting increased interest in this sector from both occupiers and investors.
“Unlike other sectors, the industrial market has been much less cyclical over recent years and continues to be dominated by long term commitments to single light industrial or logistics tenants. Rentals and land prices in the Dubai industrial market remain determined by critical mass, clustering and location. Rental rates in completed industrial units in Dubai vary significantly from one area to another with many companies willing to pay more for poorer quality space closer to the CBD than for newer and better quality space in more peripheral locations. The industrial sector reflects the importance of trade and transport to the Dubai economy and the market is likely to grow in line with the future growth of these activities,” Alan Robertson, CEO of Jones Lang LaSalle MENA, said.