Real estate expert outlines key factors to the evolution of the UAE capital's property market at Cityscape Abu Dhabi
Market maturity and developers responding to buyer demand are key to the evolution of Abu Dhabi’s real estate market, according to an industry expert.
Speaking at Cityscape Abu Dhabi's conference, Craig Plumb, head of research at JLL MENA, said the property market in the UAE capital has become more affordable.
“We are positive about what we can expect to see. Property is a cyclical business and we are in a period of a soft market. However, there’s not a huge amount of new supply expected this year or next,” said Plumb.
“In the residential market, we are looking at about 8,000 units for this year and even less next year, that’s about 3 percent of existing stock and this is good,” he added.
“The market has adjusted and is not just building a huge amount of supply that we saw three to four years ago.”
He said that the market is currently experiencing a period of lowdown largely because “it has reacted” to what is needed.
“The market has become more affordable, as developers have recognised the sweet spot isn’t super luxury, it’s at the middle market. The market is now providing for where the demand is. Developers have recognised that and are delivering a lot more product at that sweet spot."
Plumb added the UAE capital’s retail real estate sector is primed for change with the rise of e-commerce resulting in developers engaging in new trends.
“Average retail rents are falling because landlords are responding to tougher market conditions by being much more flexible in their deals. Rental contracts are looking very different now. Trends such as ‘turnover only rent’ are gaining popularity,” said Plumb.
“Pop-up shops are now a thing, with vacant retail space being given for low rent for a short amount of time to new concepts. We are witnessing a redefining of retail with the merging of online and bricks and mortar retail. Look out for more click and collect stores coming up.”
Plumb added that a challenging retail environment could well be a boon for local start-ups, particularly in the F&B space.
“We will start to see more of what we call ‘Dinnertainment’ – a mix of F&B, entertainment and retail in the same unit. I think this is a trend we’ll start to see more of being used in latent stores and we are aware of a number of new concepts looking to come into this space.”