Video first published on 05 February 2020
In our first episode, Bassem Fahmy, Chartered Membership of the Royal Town Planning Institution, UK, based in Cairo, will deep dive into the effects of COVID-19 on the urban landscape in his presentation: Success comes from finding opportunities in problems.
Look out for episode two in our series later this month, which will see Dana Salbak, Head of Research for the MENA region at JLL, tackle the market and asset class overview.
What expectations and predictions do you have regarding the Dubai real estate market outlook for 2021-2022?
The DLD recorded that in February 2021, Dubai had the highest number of secondary/ready sales in a single month since January 2017. The market is moving at an incredible rate and I predict it will continue into the near future with prices stabilizing before the end of the year.
The timeframe for Expo 2020 has changed. Now that we have a better idea of what the event will look like, what market predictions and trends do you expect to see?
I think that Expo 2020 will have a hugely positive effect on Dubai’s property market in years to come. The sheer volume of people that the Expo is estimated to attract will spark the interest of companies and professionals who may well see the benefit in setting up roots in the city. Captains of the industry may see Dubai as the perfect business hub to set up headquarters and entrepreneurs who are looking to start up new businesses, especially when the Expo site will be transformed into a business hub after the exhibition.
In my opinion, it is difficult to say whether Expo will have a direct impact on rental prices in neighbouring communities. There are so many factors influencing property prices that Expo won’t have any significant impact in the short term. Having said that, we have seen more interest being shown by multiple tenants when a well-priced, well looked after property becomes available. This may be a sign that prices may be on the upturn in the future but in 2021, I can’t see much of a change.
The metro link which has stops in communities such as Al Furjan and Jumeirah Golf Estates has piqued the interest of more tenants. For example, tenants registering their interest in Jumeirah Golf Estates rose by 30% from Q1 2020 to Q3 2020 after the announcement of the metro links in July 2020. The same can be seen in Al Furjan, an increase of tenants registering their interest in the community rose by 47% from Q1 2020 to Q1 2021.
The communities nearest to the Expo site although not on the metro line, communities such as Green Community, Mira, Town Square, Mudon, and Damac Hills are renting quickly and tenants are showing great interest in the properties. Green community is a very popular area and for some time now we have found that when a property becomes available, it is rented in record time. Expo 2020 is certainly having an impact on the popularity of these areas, however, I wouldn’t say that this is the only factor. These communities are offering properties at incredibly attractive prices, they’re new and perfect for families.
What long term predictions do you expect to see in terms of the impact of Dubai 2040 over the next 15-20 years?
Dubai's 2040 plan to be the best city to live in the world is incredible. Dubai is already a spectacular place to live, but to have leadership who consistently plan and execute betterment is hugely encouraging. The city has come a long way in such a short amount of time and has shown such quick forward-thinking leadership throughout the pandemic to keep residents safe and keep the economy on the right track.
As residents here in the UAE, we are very fortunate, and I believe things will only get better as time goes on. The 2040 plan is enticing for overseas property investors, entrepreneurs, and for expats already residing in Dubai. The city is becoming more and more of a home for everyone and a forever home at that.
Although 2040 seems a long way off, we can see that Dubai is continuously growing and looking for ways to improve the quality of life for its residents. Most recently, the introduction of the increase of LTV and lower interest rates as part of the stimulus programme. There has also been the introduction of dual citizenship, golden visas, remote working visas, 5-year visas, and retirement visas - all of which weren’t available prior to 2018. UAE leaders are making Dubai a very attractive city to live for expats.
As a result of building confidence from residents, the Dubai property market is sure to flourish as a result. Rentals will see an uptick from new arrivals and those on remote working visas and the sales market will continue to grow as families and individuals see themselves in the city for the long run. The commercial market will also benefit immensely as foreign business owners set up shops in Dubai either renting or buying commercial properties.
What are the big trends in terms of real estate technology that you are currently seeing, and what do you expect to increase in this field in the next 5-10 years?
Being pushed into a social distancing environment due to the pandemic has accelerated the real estate industry’s use of technology which will have a great long-term impact on the Dubai property market and we are already seeing this now. A number of properties have been sold after only a 360-degree tour or video tour. This is not only happening for clients who reside out with the UAE but is also becoming more popular with residents in the UAE.
For example, Allsopp & Allsopp recently sold a Lakes villa in Emirates Living to a family who was renting a villa in the same area. They had been in the market to buy for some time and when a property close by became available they were interested. However, the tenants were not comfortable with physical viewings, so we arranged a virtual tour of the property and showed the client. He decided to buy as it was the property they had been waiting for and was at a great price.
We are certainly seeing buyers and tenants viewing less. With virtual tours on many of the properties we see on property portals, buyers and tenants are using these to their advantage to save time. Virtual tours are a great way to save time and narrow down a property search - this is happening now, and I feel this will continue to happen as we move past the pandemic. Those looking for a new home are simplifying the process for themselves by ruling out areas and properties based on doing a bit of their own due diligence before they start the viewing process, so when it comes to physical viewings they have very few and it then turns into a shortlist rather than blindly viewing multiple properties in multiple areas.
Are you seeing an uptick in offices and retail spaces in 2021?
The commercial real estate market has been just as fast-paced as the residential market with start-up companies emerging, companies downsizing or upgrading and companies moving office location or buying commercial space rather than renting.
A combination of opportunity, uncertainty, circumstances people have found themselves in, and spending more time at home has made people rethink their careers and has given some the push to get into their own business and make a start. A few companies have been in contact with us to look for smaller office spaces, mainly because they have found that remote working has been beneficial to their business and they have decided to cut rental costs by moving to smaller premises. Unfortunately, during the pandemic, some companies have had to cease trading and their competitors are seeing this as an opportunity to expand their own business and take advantage of the potential new clients that are now available.
Allsopp & Allsopp have seen a rise in investors who are looking for commercial spaces after the pandemic. Commercial property offers investors a rental return of between 8-10% with a few properties offering even more. Residential investors are often not in the know about the high rental returns commercial property offers. We have had a number of cases where an investor has enquired about residential rental properties offering high rental returns and the residential agent has introduced them to the opportunities available in the commercial market and they have decided to invest in office spaces after seeing the yields available.
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With its popularity, many designers are now educating themselves on the various nuances and properties that natural stone comes in. These are the top 4 factors when deciding what finish to pick.
Much like most designs in nature, the stone is perfectly imperfect. Most natural stones are formed with voids, nooks, and crannies. If you are after a textured, surface with contrast. However, it can be quite porous and easily stained. If needed, these voids can be filled with the material to colour match. When done correctly, the naked eye can’t tell the difference.
An industry term is given to the vein like, naturally occurring, markings across slabs of stone. Whilst there are no good or bad veins, no two slabs are ever the same vein. Therefore, it is critical to visually select slabs that match your aesthetic. What you see in a brochure, is not always what you will get.
As an end product, stone slabs are sometimes sealed with a transparent finish, often making them stain resistant. This is known as the glossy finish. A glossy finish does catch a lot of reflections and can be quite bling-bling, even for the humblest of stones. A honed finish is normally achieved by sanding down or shaving off a thin layer off the stone surface. This exposes a mild texture with a matte finish.
Much like a glossy or honed finish, the bush hammered finish is quite self-explanatory. However, the result is a smooth, bumpy, textured, matte finish. Depending on the stone, the end result can resemble a leather texture.
The next time, you are selecting stone samples, you may want to ask yourself the following questions:
While there are many more technical attributes to natural stone, such as thickness, weight, scoring, daylight and many more, the above should set you down the right path when it comes to discovering your own palette.
Alan George is an architect with Orange Design Group based in the UAE.
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Healthcare real estate investment has been hit hard by the COVID-19 pandemic, so there are some things investors should know before planning their next foray into the sector.
Healthcare real estate’s full recovery may be impacted by changing patterns of use. For instance, care homes and senior care facilities, which have been hit hard by the pandemic, may not return to full occupancy straight away, hampering demand for that kind of real estate in particular. Investors may want to wait before diving straight in.
Telehealth—remote healthcare services—could drive healthcare real estate growth. As healthcare technology and video call services become more sophisticated, doctors will be able to perform tasks remotely and over Zoom more effectively even after the pandemic. It will only ever be a small segment of the market, but healthcare real estate will adjust to accommodate telehealth, with medical office buildings designed around remote healthcare.
Life sciences, covering everything from biotechnology to pharmaceuticals and biomedical technologies, will experience greater interest after the pandemic. The supply of life science properties is currently relatively limited, so there’ll be plenty of opportunities to invest in more office and laboratory spaces in the near future.
With many property owners struggling during the pandemic, some of the larger healthcare real estate owners will have been opportunistically acquiring more properties over the last twelve months. Some of the owners who have benefited, therefore, may delay selling their new properties in order to maximise their profits, waiting instead for the market to rebound.
The pandemic and the rise of telehealth has driven a demand among patients for greater convenience. Any expansion undertaken by healthcare providers may prioritise smaller, accessible offices in high traffic areas, perhaps representing a move away from the traditional hospital “campus” model.
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A REIT—a real estate investment trust—is a kind of corporation that invests in income-producing real estate. Investors essentially buy and sell shares in commercial real estate just like stock, and then earn income from their shares.
There are three main varieties: equity REITs, which own and operate real estate; mortgage REITs, which lend money to real estate owners directly through mortgages and loans; and hybrid REITs, which are a combination of the two.
REITs allow individual investors to earn income from property without buying, managing, or financing real estate. Revenue either comes from rents or from the interest earned on mortgage loans.
The other option is real estate funds, which operate very much like any other mutual fund. These can either be managed actively or passively, in the latter case by tracking the performance of a benchmark index.
There are, once again, three main varieties: real estate exchange-traded funds that own the shares of real estate corporations; real estate mutual funds; and private real estate investment funds that are professionally managed and only available to high-net-worth investors.
Where REITs invest directly in real estate, these funds invest in REITs and real estate companies, and only occasionally in the individual properties. They gain value mostly through appreciation, offering a broad selection of assets, but little short-term profit.
REITs and real estate funds are the best way to invest in real estate without having to own and manage properties. They both have different benefits: REITs are useful for generating a steady flow of income from the get-go, making them ideal for short-term profit. Real estate funds, meanwhile, are better for long-term investors, generating value through appreciation over time.
Which method is more appropriate to you depends on your immediate needs—choose wisely.
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Waleed Abbas, Assistant Housing Minister of Community Affairs recently announced that a study into the construction for six new cities is ongoing.
These new cities will form the next stage of an extensive urban development strategy already taking place.
This project involves the development of sixty-one urban areas, including the regeneration of 24 existing cities and the construction of 37 new ones, all based on the very latest smart technologies and principles.
In particular, Egyptian authorities are keen to reduce urban density and sprawl in order to create more liveable cities. This development will go hand-in-hand with better provision of basic services to urban dwellers.
Among the new cities under construction in Egypt is the prospective tourism centre at New Alamein City on the Mediterranean coast, and New Aswan City in Upper Egypt.
New Alamein, which has been under construction since 2016, will including residential, tourist, and entertainment areas, as a brand-new university and a major marine science research centre.
This major urban development plan is intended to increase Egypt’s urban area to 14 percent of the country, designed in part to accommodate its rapidly expanding population.
To assist the construction, the Egyptian government is allocating significant funds and promoting foreign investment in the country’s real estate sector.
The real estate sector is a significant part of Egypt’s economy, representing around 16 percent of the national GDP. It is expected to grow by more than 10 percent over the next year.
Egypt is forecast to experience strong economic growth over the next few years, and the Egyptian government hopes this—and the sheer number of new construction and development projects—will make the country an attractive destination for real estate investment.
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Cityscape Intelligence takes a look at the challenges and opportunities in the UAE’s retail sector in 2021. With the COVID-19 pandemic closing shops across the UAE and consumer demand plummeting, demand is expected in the sector this year.
However, incredible pent-up demand, the rapid rollout of vaccinations, and the upcoming Expo 2020 Dubai will lead to a huge increase in retail traffic as restrictions ease and national and international consumers return to the shops.
The new analysis projects further growth over the next few years, with retail sales expected to maintain 6.6 percent annual growth, to reach around USD70.5 billion by 2025.
“Non-store retailing”, including eCommerce, is forecast to grow at a much higher rate—14.8%—than in-store retail, at only 5.7%.
This reflects already high retail spending in the UAE, with average spending on eCommerce at around USD2,554 per household. This is double the global average, putting the UAE well ahead of its neighbours across the MENA region.
Dubai and Abu Dhabi are both predicted to see a huge increase in retail real estate. According to JLL, Dubai has, as of 2020, total retail stock of 4.2 million square metres. Abu Dhabi, meanwhile, offers 2.8 million square metres.
The UAE’s retail real estate market has become extremely favourable to renters and potential buyers, with increased supply and reduced demand during the pandemic driving down prices. This will lead to more investment opportunities for foreign and local investors, which will in turn drive even greater growth for the country’s retail sector.
UAE-based eCommerce firms are set to benefit from the marked shift towards digital retail, which will also increase demand for logistics and warehousing real estate.
This shift, which is taking place across the region, is likely to open up opportunities for Emirati companies, particularly in high population markets like Egypt and Saudi Arabia.
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In spite of international economic turmoil, British real estate companies actually reported a noticeable increase in interest from buyers in June and July 2020. However, travel restrictions nevertheless mean the UK witnessed its lowest level of real estate investment since 2010, with a total of GBP32 million in the second quarter of 2020.
Real estate firm Knight Frank estimates that the total year-end transaction volume of Middle East capital into the UK was around GBP1.4 billion in 2020, a decrease of around six per cent on 2019.
Boris Johnson’s roadmap for exiting lockdown does not have a firm date for foreign travel to and from the UK, but once these restrictions are lifted, Middle Eastern investment can resume.
Knight Frank expects the market to rebound significantly in 2021—perhaps by as much as 14 per cent. The continued interest in UK real estate despite the pandemic is testament to the enormous potential this market has for recovery.
Among the many real estate projects in the UK to have benefited from Middle Eastern backing is the London Resort, a proposed theme park based on British media properties and backed by Kuwaiti investment. It is currently slated to begin construction in 2022.
March saw Cordatus Real Estate and JISR Holdings launch a new partnership designed to provide easy access to the UK market, source opportunities and help manage the assets of Middle East-based investors.
Recognizing consistent high confidence in the UK among Middle Eastern investors, it anticipates acquisitions to be between GBP10 million and GBP50 million across office, industrial, retail and residential real estate.
It speaks to the huge opportunities presented to Middle Eastern investors by the UK real estate landscape, even during the COVID-19 economic downturn.
Once lockdowns are relieved and global travel possible, investors are expected to flock to the UK in greater numbers.
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Qatar’s economy is benefiting not just from the investment opportunities the world’s biggest sporting event have created, but also from normalisation of diplomatic relations with some of its neighbours after a protracted geopolitical dispute. This means Qatar has become a much more stable and reliable target for investment.
The FIFA World Cup has prompted massive investment in stadiums, airports, rail and metro lines, and leisure and hospitality facilities designed to make the country an accommodating destination for fans in 2022. It has led to around USD13.6 billion-worth of project contract awards each year.
The country has also rejuvenated downtown Doha, expanded its oil and gas fields, substantially improved public transport infrastructure, and essentially built the city of Lusail from the ground up.
Meanwhile, sectors such as finance and tourism will benefit from increased air travel, transfer of liquidity, and greater economic collaboration between Qatar and its Gulf neighbours following restoration of diplomatic ties.
Saudi clients are in particular expected to flock back to Qatar, shifting funds they withdrew at the beginning of the economic blockade back to Qatari banks.
The FIFA World Cup is by no means the end of Qatar’s ambitious infrastructure plans.
It has already been courting investors for new projects, and recently awarded a USD13 billion contract to an international consortium to lead its North Field Expansion natural gas megaproject.
Qatar hopes a successful tournament will help bolster its international image and reputation as an attractive destination for investment—and tourism—thereby encouraging more interesting in its real estate market.
This is particularly important as Qatar and its neighbours embark on ambitious projects to diversify their economies away from oil, with Qatar particularly interested in building its knowledge economy. Hydrocarbons today make up around half of the country’s economy, making this project an urgent one.
Qatar intends to improve productivity, boost competitiveness, strengthen labour laws and encourage more private investment in its economy.
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