By Andy Sambidge
Fitch Ratings says upbeat on tourism, retail but challenges remain on residential, office markets
Dubai's prime retail and hospitality sectors have performed well this year and are well placed for 2013, according to Fitch Ratings.
In a new report, the ratings agency said retail rentals and hospitality revenues are holding up and have shown healthy performance in 2011 and 2012 to date and "have potential for a strong start in 2013".
It added that Dubai's prime retail and hospitality sectors "continue to benefit from healthy tourism, partly due to the turmoil affecting some Middle East destinations and the positive impact this has had on Dubai as being a major Middle-Eastern preferred destination".
However it added that despite some stabilisation, challenges remain for the office and residential sectors in Dubai.
"Although offices and residential prices and demand are stabilising in prime locations in Dubai, widespread recovery in these sectors is still challenged over the medium term," Fitch said.
Fitch said it believes that a widespread recovery is still challenging and the sectors will remain pressured, although "prices in premium areas of Dubai are now recovering".
Overall, most property investment and development companies in Dubai have had a very bumpy ride since mid-2008.
However, companies operating in prime retail and hospitality have been able to weather the challenging market conditions better than companies focused on the office and residential sectors, Fitch's report said.
"The sector's stable outlook is reliant on the ability of real estate companies to refinance debt, and the main challenge of maintaining performance in light of the over-supply of residential and office space," the report added.
Fitch said the successful refinancing of maturing debt by real estate companies in 2011 and 2012 "has helped remove the negative bias in the outlook".For all the latest retail news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
More Hotels need to be built now! that is obviously, at the current rate of growth in Dubai and the GCC in general it will soon be the hottest place on earth ( no pun intended eh). World Cup , Expo ,Olympics, Taj Mahal , Theme Parks, Real Estate opportunities, manufacturing ventures, small business/medium free zones. Endless low cost skilled Labour force Worlds most important Air Hub .The endless parade of entertainment Super Stars arriveing in Dubai. Auto and Horse racing . Trade shows/Fashion shows alone bring in 10,s of thousands alone.Yes now is the time to build.
and yet in another report on hotels, things are not so rosey!
"Tourism chiefs may want more hotels for the UAE - but figures released on Sunday showed hotel occupancy, average daily rates and revenues all dipped in September compared to the same month in 2011.
Occupancy levels at hotels in the UAE last month slid 2.4 per cent to 66.6 per cent.
Average daily rates were down by two per cent while revenue per available room waned by 4.4 per cent, according to the latest numbers crunched by hotel industry consultant STR Global.
The average daily rate for a hotel in the UAE was Dhs599.
The average revenue per available room (RevPAR) - achieved by dividing a hotel's total revenue by its available rooms - was Dhs399."