Construction & Real Estate
From The Report: Dubai 2015
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The value of infrastructure contracts awarded in the UAE in 2014 is expected to increase by more than five times, to $15.2bn. This rising trend is reflected in Dubai’s construction sector, which accounted for about 8% of GDP in 2013. The sector’s growth has been driven by projects linked to higher tourism numbers and upcoming international events, and Dubai Expo 2020 in particular. Expo 2020 preparations are expected to generate $23bn, or 24.4% of current GDP, between 2015 and 2021. The real estate market was severely affected by the crash in 2009, which saw property values fall by 40% in the first three month of 2009. Things have improved significantly since then, and tighter regulations, coupled with strong fundamental demand, have ensured that the future of the emirate’s real estate market is a bright one.

This chapter contains an interview with Hesham Abdulla Al Qassim, CEO, wasl Asset Management Group.

Articles from this Chapter

Overview

Demand in Dubai’s construction sector has soared in light of international events and higher tourism numbers
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During the last real estate boom in 2006, Dubai was home to 30,000 cranes, 24% of the world’s total. Although many of these came to a halt as the local economy was hit by the global financial crisis, the city looks set to reclaim its title as the crane capital of the world, according to Simon Gray, the managing director of Chesterton MENA. It is not difficult to see why. Dubai’s real estate market has been brought back to life, residential sales prices have risen steeply and once-pessimistic…

Interview

OBG talks to Hesham Abdulla Al Qassim, CEO, wasl Asset Management Group
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Interview:Hesham Abdulla Al Qassim What impact do you see the recently announced government incentive to encourage more private investment in the hospitality sector having on the city in the medium term? HESHAM ABDULLA AL QASSIM: By 2020 two- and three-star hotels should ideally comprise at least 50% of the market, while the rest should be split between four- and five-star hotels. This is far from the case at the moment. There are currently 84,000 hotel rooms in Dubai, and around 45,000 of…

Analysis

Dubai’s need for affordable housing presents challenges for developers
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The delivery of affordable housing has become a major conundrum across the entire MENA region in recent years. According to Jones Lang LaSalle, the affordable housing deficit across the MENA region stood at 3.5m units in 2011. The largest contributor to this is Egypt, which currently has a shortfall of 1.5m units, while Morocco and Saudi Arabia also have substantial deficits. In this regional context, Dubai’s affordable housing situation looks more manageable. Liberalised Market Even so, according…

Overview

Dubai’s developers and investors alike on the road to recovery
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With a robust rate of economic growth over the past year contributing to rapidly increasing residential sales prices, confidence has gradually returned to Dubai’s property market despite the impact of the global economic crisis of 2008-09. In late September 2014, at the 13th annual Cityscape Global exhibition – an informal barometer of the real estate climate in the emirate – the business-to-business element of the show was in full swing. Development launches and transactional activity were…

Analysis

Both the government and private developers are busy with preparations as the emirate gears up for Expo 2020
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As Dubai prepares to stage the World Expo in 2020, the focus of development is shifting from the central axis and moving to secondary locations in the south and east. The Dubai Municipality’s medium-growth scenario forecasts a population of 2.8m by 2020, while city planners are aiming to accommodate 3.4m in time for the Expo. Consequently, another 25,000 ha of land will need to be released for residential, commercial and industrial use, taking the total area of developed land in the emirate to…

Analysis

More cautious lending policies in Dubai intend to maintain sector stability – at a cost to developers
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The bursting of Dubai’s property bubble in 2009 led to a more cautious attitude towards the real estate sector. A number of regulations were put in place to discourage the flipping of residential units and confidence in property as an asset class has been restored, with prices rapidly moving towards the levels achieved prior to the global financial crisis in 2008. However, the effects of the crash can still be felt: government and state-supported companies in the emirate have debt obligations of…

Analysis

More of Dubai’s residents financing property purchases with mortgages
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Although Dubai’s residential real estate market is dominated by cash buyers, mortgage transactions are on the rise amidst increasing demand. Between 2006 and 2014, mortgage volumes tripled, while in the 18 months leading up to March 2014, mortgages went up as a share of total real estate transactions, from 15% to 28%. By May 2014 mortgages accounted for 32% of total transactions, according to the Dubai Land Department. These statistics reflect both the fundamental demand in the real estate market…