Ryan Mahoney (Dubai, UAE) is the CEO of Cencorp, a conglomerate of real estate-related businesses. He also cofounded a leading UAE property website, and has taken an active role in the development of several early-stage companies, providing him with expert insights into Dubai’s real estate sector. This article reviews the CRC Commercial Property Market Report for the 2021 financial year, looking at how economic growth continued to surge throughout Dubai and the wider UAE despite disruption created by the Covid-19 pandemic.
As the CRC report indicates, in 2021, Dubai’s commercial property market reached a turning point. Whereas the pandemic had a detrimental impact for both landlords and tenants in numerous countries worldwide, Dubai saw a steep increase in both prices and demand for commercial real estate through 2021, with sales surpassing even-pandemic levels.
CRC’s 2021 Commercial Property Market Report was published in January 2022, at which point, CRC’s Director, Ben Bargh, noted in his foreword that Dubai’s commercial property sector had made an almost complete recovery, with confidence building, and business owners becoming increasingly optimistic regarding their enterprise’s future. A common trend that emerged in 2021 was a desire to secure better, more extensive commercial premises for a longer period.
Dubai’s government introduced a number of new policies, including launching a visa scheme for foreign professionals, and transitioning to a working week that runs from Monday to Friday like many Western countries. Ultimately, Dubai has become even more attractive to expats, creating growth across the commercial real estate sector, and bolstering Dubai’s economy. Post-pandemic, Dubai retains its position as the region’s strongest economy. It is predicted that Dubai will continue to attract a high level of foreign investment in the months, and years, to come.
As normality returns across the markets, CRC anticipates that commercial real estate prices will continue to rise steadily throughout the country, increasing confidence in Dubai’s property market and its economy as a whole.
In 2021, Dubai’s commercial property market was characterized by steady recovery. Demand, transactions, and property prices returned to, and even exceeded, pre-pandemic levels, with the total number of sales transactions exceeding figures from 2020 by an impressive 19%, and prices increasing in both leasing and sales. CRC predicted in its report that this trend will continue as businesses and the economy expand.
Throughout Dubai, office sales doubled in 2021. Predictably, Business Bay took the top spot as the most desirable community for office spaces, with Dubai Silicon Oasis, Barsha Heights, Al Barari, and Jumeirah Lakes Towers all ranking highly in terms of communities with the highest number of office sales in 2021.
Turning to retail unit sales in 2021, International City ranked highest, followed by Jumeriah Lake Towers, and Mohammed Bin Rashid City, the latter making strides recently and showing impressive growth in both commercial and residential markets.
The CRC Market Report bears out the UAE’s economic resilience through the Covid-19 pandemic, a fact demonstrated by its thriving real estate sector. Navigating its way through the pandemic in 2021, Dubai’s commercial property market closed the year 35% up on the previous year’s figures, with circa 31 billion UAE Dirham changing hands in unit transactions. Whether it is the lifestyle, or new legislation paving the way for citizenship and a golden visa scheme for foreign investors, Dubai attracted foreign investors and expats in their droves in 2021, which in turn has boosted demand for commercial real estate. The commercial property market has become an increasingly attractive investment option for Dubai residents too, with office spaces becoming particularly appealing. The number of offices sold increased by 101% in 2021, totaling 1.99 billion UAE Dirham.
Expo 2020 combined with the resumption of global travel led to more than 6 million tourists flocking to Dubai in 2021, outperforming 2020’s figures by some way, according to the Khaleej Times. Retailers reported a subsequent pick up in footfall, which has driven increased need for retail units, with premises at street level especially sought after, and communities like Jumeirah Lake Towers proving particularly popular. Compared with figures from 2020, retail property sales were up by some 96% through 2021, with the value of transactions rising to almost 690 million UAE Dirham in total.
Following 2020’s considerable pandemic-related economic uncertainties, CRC data suggests that trust in Dubai’s commercial property market bounced back in 2021, with no sign of growth abating anytime soon.