Expert sees new priorities for UAE’s real estate beyond Expo 2020
07 October 2021, Trade Arabia News
Top consulting firm Booz Allen Hamilton has identified the key trends that have emerged and can be leveraged by the UAE’s real estate industry to thrive beyond Expo 2020 event. These include:
*Shift in the UAE’s demand base boosting alternative segments: From being a stopover destination, it is evolving into a country of choice for long-term stays where families and individuals lay down roots, study, and retire. Aided by expatriate-friendly visa and investor programs, a steady demographic shift is already occurring with old and young dependency ratios at a decade high.
Developers and investors should explore resulting alternative pockets of demand, such as larger and affordable family housing, student housing, or assisted living facilities for affluent retirees. Other pandemic-driven segments gaining momentum include healthcare and well-being, logistics, digital infrastructure, and biotech, stated the expert.
*Asset management to the fore: As in all real estate cycles with subdued development growth, the focus shifts to extracting maximum value from standing assets through rigorous and active asset management.
As the UAE’s largest asset owners consolidate and rationalize portfolios like with Dubai Holding’s take-over of Meraas in 2020, the pressing priority is the in-depth management of operating assets and more synergetic re-thinking of uses, especially amidst Covid’s new realities.
This includes the rejuvenation of mall offerings to a rapidly changing, more local demand, rethinking lifestyle destinations and their digital integration, repurposing under-used offices into alternate uses, and reimagining the hotel experience beyond the room.
*Double-down on third-party services: As demand slowly recovers, top real estate players have been redirecting their best-in-class capabilities into safe businesses that generate sustainable recurring income, such as fee-based development and operations. One of the regional pioneers in the space, Aldar went all in on such services and reaped immediate rewards from its investor base.
*Time for urban regeneration: As the urban sprawl of UAE cities expands, older communities could largely benefit from a push for strategic regeneration, coupled with stronger integration and connectivity initiatives.
The recently unveiled Dubai 2040 Urban Master Plan, for instance, seeks to increase population densities around mass transit stations, while boosting green spaces and improving quality of life. Developers can benefit from a shift in focus from increasingly remote greenfield opportunities to selective regeneration projects in the historical cores of Sharjah, Dubai, and Abu Dhabi.
*Technology, sustainability and innovation at the center of communities: With technologies reaching efficient scales, the pandemic boosting the need for connectivity and digital solutions, and the rise of ESG financing, community developers and operators should increasingly build their products and services around winning technologies.
With Dubai house prices increasing for the first time since 2015, the fundamental question is whether the Expo 2020 will have a transitory or long-lasting impact on the UAE real estate market.
Bruno Wehbe, VP at Booz Allen Hamilton, said: “While Expo 2020 will trigger a turnaround of the UAE’s real estate sector, and the case for optimism is real, long-term priorities for real estate players need to evolve from the last few decades.”
“By tapping new alternative products and segments, doubling down on asset management and fee-based services, and embracing technology, UAE developers can set themselves up for another decade of phenomenal growth,” he stated.
Some of the most common technologies Booz Allen is seeing in the market include EV charging stations, digital CRM lifecycle services, proptech and smart home solutions, sustainable power generation and integrated utility control services.
“Despite the setbacks of the pandemic, opportunities are emerging for savvy developers who pay attention to timing and demand,” stated its VP Joseph Mazloum. These players will lead the resurgence into profitability and sustainable yields, he added.