The UAE’s real estate sector demonstrated resilience despite challenging global economic conditions, leading to robust growth across major asset classes in 2023, according to JLL’s A Year in Review UAE report.
Faraz Ahmed, Research Director at JLL MENA, highlighted the industry’s strong performance, particularly in the office and residential sectors, driven by increased stock and demand.
“With the government focused on strengthening and diversifying the country’s economy, real estate will continue to be a key driver owing to the robust demand and favorable investment climate in the country,” he said.
UAE residential real estate sees significant property transactions
The residential sector witnessed remarkable growth in transactions in both primary and secondary markets in 2023, with Dubai experiencing a 51 percent year-on-year increase in value and a 43 percent year-on-year increase in volume.
In Abu Dhabi, successful launches in the off-plan segment contributed to a significant rise in total transaction values, which surged by 102 percent annually, and a 77 percent year-on-year increase in volume.
In Q4 2023, Dubai’s average villa sale prices reached a new all-time high, surpassing the previous peak of 2014 by 15 percent. Over 36,000 units were delivered in Dubai in 2023, raising the total stock to over 719,000 units.
In Abu Dhabi, over 5,000 units were completed, resulting in a total completed stock of over 284,000 units.
Approximately 34,000 units are scheduled to be delivered in Dubai in 2024, with around 8,000 units anticipated in Abu Dhabi.
Demand for office spaces in UAE rises
The office sector experienced a surge in demand for quality office space, leading to the development of new projects in 2024. Commercial real estate developers capitalized on the increasing demand, with certain free zones in the UAE expanding their jurisdiction or launching new projects.
In Dubai, the delivery of approximately 92,000 sqm. of gross leasable area (GLA) in 2023 increased the total stock to 9.2 million sqm. Additionally, 44,000 sqm. of new office space is scheduled to be added this year. In Abu Dhabi, approximately 112,000 sqm. of new office space is expected to be introduced in 2024.
Retail sector expands in Dubai, Abu Dhabi
The retail sector saw mall operators adopting a more dynamic management strategy, focusing on enhancing the customer experience through experiential retail concepts and food and beverage offerings.
In 2023, around 123,000 sqm. of retail space was added in Dubai, bringing the total stock to 4.8 million sqm.
In Abu Dhabi, approximately 250,000 sqm. of retail GLA came online, increasing the total stock to 3.15 million sqm.
In 2024, an additional 160,000 sqm. of retail space is expected to enter Dubai, while Abu Dhabi is anticipated to introduce around 19,000 sqm. of new retail GLA.
Hospitality sector maintains lpositive momentum
In Dubai, approximately 5,000 keys were added, bringing the total stock to 153,000 keys, while Abu Dhabi’s total stock surpassed 32,500 keys with the addition of 200 keys.
Dubai has approximately 7,000 keys scheduled for delivery, while Abu Dhabi expects around 700 keys to be added to its inventory.
City-wide occupancy in Dubai reached 77 percent, while Abu Dhabi sustained robust occupancy levels of 72 percent in November 2023.
Despite a decrease in average daily rates (ADR) in Dubai, the overall increase in tourist arrivals contributed to maintaining a healthy revenue per available room (RevPAR) of $138.
In Abu Dhabi, ADR reached $143, marking a notable increase of 20 percent compared to the previous year, with RevPAR experiencing a significant annual improvement of 25 percent to reach $103.
The positive momentum in the UAE’s real estate sector is expected to continue in 2024, supported by factors such as demand, government initiatives, and ongoing development in various industries.
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