Cluttons expects more stalled Dubai projects to restart

Real estate firm sees increased consumer confidence, higher office demand so far in 2013

Increased consumer confidence in Dubai coupled with higher demand for office space during the first quarter of 2013 will encourage previously stalled developments to restart, Cluttons has said in a new report.

The real estate firm's Q1 study on Dubai’s office and retail property sectors said Dubai’s retail sector continues to show considerable activity and is led by the pull of the Dubai Mall as a global retail destination.

It added that despite predictions of price rises, Dubai’s office market is very fragmented, with several submarkets struggling to attract tenants.

However, some locations have seen a rise in rents over the past six months, Cluttons said, adding that this has been apparent particularly in areas that suffered most from the property collapse of 2008 such as Jumeirah Lakes Towers (JLT), Tecom C, Al Barsha and Business Bay.

In these areas, commercial rents had previously fallen by as much as 50 percent.

"JLT and Business Bay, in particular, have seen a significant improvement in both inquiry levels, take-up of space and rising rental levels," the Cluttons report said.

In these locations, Cluttons said it has seen rents increase by 10–15 percent in better quality and completed projects.

Cluttons added that across the prime Grade A markets, there is more evidence of competitive pricing of office space with landlords analysing the demands of tenants more closely.

On retail, the report said high activity during 2013 was due to high wealth levels and consumer confidence. 

In February, Emaar Properties confirmed that Dubai Mall visitor numbers had risen 20 percent in 2012, with retail sales up 24 percent year-on-year. Planned expansion of Fashion Avenue is still on schedule to complete in 2013.

"Elsewhere, annual footfall remains strong in malls such as Mall of the Emirates, Mirdif Mall and Deira City Centre, that target the mid to high level income residents and tourists," Cluttons added.

"These shopping complexes have continued to perform well and their successes are demonstrated by their very low to zero vacancy rates."

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Posted by: Samara Pope

In mature markets, a property investor sits down with his lawyer, property surveyor / market specialist and conducts a due deligence exercise before putting money down. They buyer's right to inspection of goods and terms of sale before purchase.

In Dubai it seems that there are so many desperate people coming from countries where they have been socialised to have no concept of even basic human rights, leave alone investor's rights, they dont think there is anything wrong with putting money down in millions without questioning what they are getting in return.

In fact they are desperate to not loose the chance or opportunity to be considered by the developer / seller.

Please, please, take my money, here's a suitcase full of it, no questions asked . . . why would there ever be any investor rights or accountability when a market is rampant with such buyers. In comparison, the mature investor who dares to ask to read the contract before putting money down is a waste of time.

Posted by: Ronald

It is called money laundering.

Posted by: Spin

What is interesting is that Cluttons makes no report on Dubai Sports City whatsoever, in fact no one does when it comes to this place in the desert. When are any of the projects not yet started or just resemble a hole in the ground going to restart after genuine buyers purchased more than 6 years ago in DSC; especially the ones where the developer or was it an investor agency who promised lots and delivered nothing. What an absolute disgrace.

Posted by: Neil

Its great Dubai is getting some confidence back but what really needs done is to nail down the concerns of investors into property, the wobbliness of the regulatory system needs some strong leadership. The enforcement of maintenance payments by owners would mean service companies can fund the building maintenance and also speed the handover of buildings to the owners, this stumbling block is a boil which needs lanced plus the issuance of laws and regulations with little thought other than printing them in the local newspapers and then waiting for the reaction is no way to do business or build confidence with a multi-bullion dollar industry and sector.

Posted by: Laks

Dubai will be back?? ...Dubai is already back!!

Posted by: Billy

Laks this is very naive of you and such complacency will only make the shaky start to recovery that is underway more difficult to stabilize. Furthermore it is this very same attitude that helped cause the massive issues in the first place. So lets stay real shall we.....Dubai is thankfully well on the road to recovery but it is a long road with many twists and turns to be negotiated and no matter how many people like Cluttons and yourself try to talk up the "we are back" rubbish Dubai is definitely not there yet.

Posted by: Ronald

Here we go again. Agents with too much time on their hands talking up the non-existant property boom, making claims that the reporter doesn't bother to check out, no actual facts and a myth building that Dubai is back.
Dubai will be back, make no mistake, but next time there will be reality checks, in spite of all the silly press releases from Cluttons etc.

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