Image: WAM/ For illustrative purposes
The UAE’s real estate market is expected to maintain its upward momentum in 2024, building on the strong growth experienced in 2023, despite a softening global economic outlook, according to experts at JLL’s Navigating the Growth Spectrum: Exploring Strategies for Sustained Success event held in Dubai.
The panel of analysts highlighted robust economic fundamentals, strategic government initiatives, and increased investor confidence as key drivers of growth across the UAE’s diverse property market.
They noted that the short- to medium-term outlook remains positive, with high demand in key asset classes such as residential, hospitality and office spaces.
Resilience amid global challenges, say JLL experts
While global inflation and rising interest rates have put pressure on many markets, the GCC region, including the UAE, has shown resilience, aided by strong private and sovereign wealth, along with rising infrastructure spending. JLL experts pointed out that these factors have insulated the region from some of the global economic headwinds, maintaining investor interest.
“Despite global uncertainties, the UAE real estate market remains robust, buoyed by government-led initiatives and growing investor trust,” said James Allan, CEO for JLL’s Middle East and Africa (MEA) region. “The positive outlook reinforces the UAE’s position as a prime destination for regional and international investors.”
Abu Dhabi and Dubai residential sector: Affordable housing gains ground
Dubai, in particular, has seen an uptick in luxury off-plan property launches, yet the residential segment most in demand remains below Dhs3m.
This shift in demand is providing developers with new opportunities to meet the growing need for affordable housing options. In line with this trend, approximately 34,000 residential units are expected to be delivered in Dubai in 2024, with Abu Dhabi slated to deliver around 8,000 units.
JLL analysts indicated that while the pace of growth in residential transaction volumes may slow in the coming year, demand for branded residences, wellness-focused properties, and co-living spaces will continue to rise, reflecting evolving lifestyle preferences.
Commercial real estate: Limited supply, rising rents
The UAE’s commercial property market remains highly competitive, particularly for high-quality office spaces.
A surge in demand from occupiers and a limited supply of Grade A offices have led to continued rent increases, making it a landlord’s market.
Despite a shift toward hybrid working models, the demand for flexible office spaces has risen, further tightening supply in key business districts like Downtown Dubai and Abu Dhabi’s Central Business District.
Logistics and industrial growth
The industrial and logistics sectors are also poised for growth, with the UAE maintaining its leadership position within the GCC.
The UAE ranks 7th globally on the Logistics Performance Index, driven by government initiatives such as Operation 300 Billion and the UAE Industrial Strategy 2030. Strong demand for logistics and warehousing solutions, fueled by e-commerce and third-party logistics (3PL) companies, is expected to drive continued expansion in the sector.
Retail and hospitality
In retail, malls across the UAE are being reimagined into community hubs, introducing services such as fitness facilities, clinics and co-working spaces to cater to the growing demand for convenience and technology integration.
Luxury brands continue to flock to Dubai, while Abu Dhabi is establishing itself as a family and cultural entertainment hub.
The hospitality sector is also set to see sustained growth, underpinned by a strong tourism pipeline and an extensive events calendar. Dubai’s status as a global tourist destination, along with growing volumes of both leisure and business visitors, continues to drive the performance of hotels and other tourism-related assets.
JLL experts remain optimistic about the UAE’s real estate prospects, highlighting its strategic position as a financial and business hub in the region.
Read: UAE real estate: Over 30,000 residential units to be delivered by year’s end