Opinion: Has real estate finally turned a corner in the UAE?

Cityscape Global project launches are focused on what customers actually want to buy
Opinion: Has real estate finally turned a corner in the UAE?
Real deals Cityscape Global has seen developers competing for the attention of first time buyers, seasoned real estate owners and major investors
By Jeremy Lawrence
Fri 05 Oct 2018 12:44 AM

At last year’s Cityscape the focus was on affordability, which was a welcome step given that whole swathes of investors had for too long been priced out of the market.

This imbalance has largely been addressed, with studios in Dubai now available for less than AED500,000 (though fear not, money-bags investors, a Burj Khalifa penthouse can still be yours for AED100m).

But as one CEO told me recently when we were having the perennial State of the Economy conversation, simply dropping prices is not enough. “You still have to be offering a product or service that people want,” he said.

New ideas

Last week’s Cityscape was encouraging for exactly this reason. Imkan’s Aljurf was one of the most striking. For starters, it has been conceived as a second-home destination, which is a relatively new concept. (Kleindienst is billing its Heart of Europe as a staycation homes project, but with prices from AED15m-100m).

Whatever the price point, developers must offer something new that people are actually excited to buy

Then there is the location in Ghantoot between Abu Dhabi and Dubai, which is a beautiful and underused area. Spread along 3.4km of beachfront, and featuring two marinas, a wellness resort and serviced residences, it will have all the ancillary facilities needed to make it a real community.

Also up that end of town, Marsa Meydan, in Jebel Ali, will have a climate-controlled marina to make it a year-round attraction. Waterfront villas with private pontoons will sit by a network of canals and the seafront, with hotels, shops and cafes lining the canals and boardwalk.

Aljada in Sharjah might offer apartments for less than AED300,000 but is far from a budget location. Arada, the developer, announced Central Hub as its focal point, designed by Zaha Hadid Architects. Larger in scale than London’s Green Park, the car-free zone is designed to be walkable even during the summer and will include a public square, along with an outdoor cinema, food-truck village and skate park.

And finally, Madinat Jumeirah Living is Dubai Holding’s pedestrian-centric, residential development, with shaded walkways, green spaces and limited car access. The project will include a community centre, daycare centres and parks, all connected to Souq Madinat via a footbridge.

Clear objectives

These projects have a few things in common. They’re all attempts to build real communities, with year-round, family-friendly attractions and outdoor spaces that have multiple uses. They are not characterised by endless blocks of towers, identikit suburbs divided up by busy roads, or golf courses accessible only to the few.

Here are some other factors to consider. Second homes, located in vibrant communities, will be an attractive Airbnb option, making them a more profitable asset, and also widening Dubai’s tourism offerings. They’ll also be great locations for active retirees taking advantage of the new visa options.

So there are lots of firsts here, which just leaves the six-million-dollar question: is there enough demand?

Other issues addressed

As noted on page 22, the topic on everyone’s lips at Cityscape was ‘oversupply’. Rera CEO Marwan Ahmed Bin Ghalita addressed this directly, saying it was for developers to judge. “There is always an economic cycle and this industry is in the hands of the developers and whatever they want to offer to the investor.”

That’s not passing the buck. Property CEOs are grown-ups who have to make their own decisions about the market.

And it seems they have concluded that there is long-term demand. Judging by these projects they have also realised that you cannot just throw more of the same at the city – they must be inventive, bold and also realistic about what investors are prepared to pay.

I’d argue, then, that Cityscape moved us on from last year where the focus was simply on price. Finally there is an acknowledgement that, whatever the cost, developers must offer something new that people are actually excited to buy. Simple, right?

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