ICAEW: UAE Real Estate Market Shows Positive Signs, But Must Maintain Fiscal Reforms To Attract Foreign Investors
The UAE real estate landscape is maturing and expected to recover post Expo 2020. Although oversupply is a feature of the market, improvements in market transparency will be helpful in stimulating demand. This was the view during ICAEW’s Corporate Finance Faculty (CFF) roundtable on the future of supply and demand of both commercial and residential properties in the UAE.
Panellists and invited guests discussed the need for a more sustainable balance between supply and demand in the UAE real estate market. Speakers at the roundtable agreed that the UAE real estate landscape is growing – highlighting a significant uptick in secondary market transactions in recent months, compared to previous years. However, the pick-up in investments is yet to overturn the supply in residential properties.
They also highlighted the threat that e-commerce technology poses for landlords of commercial properties, who must uphold rent and occupancy levels of their retail spaces. They called for much-needed repurposing of commercial spaces to accommodate more indoor social activities and modern working spaces.
Panellists included Mahmoud El Burai, Vice President, International Real Estate Federation – Arabic Countries ; Murray Strang, Head of Dubai, Savills; Dr. Martin Berlin, Global Deals Real Estate Leader, PwC; Tara Marlow, Head of Real Estate, Hotels and Leisure, Al Tamimi & Company; and Racha Al Khawaja, Group Chief Distribution & Development Officer, Equitativa. The event was moderated by Alexander Gross, Senior Director of Drooms.
Panellists applauded Dubai’s creation of the Higher Real Estate Planning Committee, which aims to achieve a more sustainable balance between supply and demand in the emirate. Since its creation in September, the Dubai Land Department has recorded a 134 percent increase in property transactions. The speakers agreed that, in principle, such regulatory oversight would not only increase the competitiveness in the real estate sector but help the UAE achieve its long-term economic sustainability goals.
Michael Armstrong, FCA and ICAEW Regional Director for the Middle East, Africa and South Asia (MEASA), said: “As the UAE real estate market matures, it needs to put in place the necessary measures to regain control over the supply and demand dynamics and restore investor confidence. We believe that the government’s newly implemented reforms will help to re-establish the UAE as a preferred property investment destination and contribute to the sector’s recovery post Expo 2020.”
Alexander Gross, Senior Director of Drooms, said: “Dubai has seen rapid transformation and significant growth over the last few years, in terms of both population and FDI. As the real estate sector becomes increasingly balanced, the government must focus on improving regulatory and investment procedures to entice even more investors.”
In terms of other reforms that are expected to follow, speakers advised that the UAE should implement a real estate master-plan, for both residential and commercial properties, to not only increase investor confidence but to provide more transparency on investment opportunities for both ongoing and future projects.
Panellists also discussed the need to maintain fair competition between private developers who find it difficult to compete with highly funded government owned developers in the market.
The event was introduced by Sam Surrey, Partner, Middle East Financial Advisory Transaction Services at Deloitte and Chairman of ICAEW CFF in the Middle East. Held in partnership with Drooms, the event was hosted last month at the Capital Club, in Dubai International Financial Centre (DIFC). It was attended by more than 100 ICAEW members and senior business representatives from major global and regional financial organisations.
