The Dubai Real Estate Market continues to soar
The commercial property market right now is the strongest it’s been since 2016, with office, warehouse and retail units in high demand for both sales and leasing according to our recently released commercial property market report for Q1 2022.
As Dubai opened back up to the world and the majority of restrictions were lifted, the trust in the commercial property market recuperated, resulting in increased demand for properties for sale.
New policies issued by the government at the beginning of 2022, such as modifying the working week to Monday – Friday to align with the rest of the world, have made Dubai even more attractive to investors looking to grow or expand the business.
Overall, it can be expected that the commercial property market will continue on an upward trajectory, supporting growth in Dubai’s property market and the economy as a whole.
Here are the headline statistics from the report:
Q1 2022 has followed on from the trends we saw in 2021, with prices, demand and transactions continuing to rise. The commercial property market has experienced a 107% increase in sales value for Q1 2022 compared to Q1 2021.
The Dubai property market had a total sales value of nearly AED 56 billion in the first quarter of 2022, according to DXB Interact, a record breaking quarter compared to previous years. At CRC, our invoiced transactions rose 62% in Q1 2022 over Q1 2021.
Office and retail sales remain at the forefront of the growth, with offices experiencing a 31% increase and retail a 104% increase for units sold over Q1 2021. The total sales value also continues to rise, as offices have seen a 71% increase and retail units a 49% increase over Q1 2021.
Increasing demand combined with the limited supply of Grade A commercial spaces is an ongoing trend visible through the first quarter of 2022. As businesses have successfully rebuilt after suffering from the impact of the pandemic, the objective is now to expand, the need for larger office spaces is rising, and as the occupancy of these spaces increases, so does the shortage in stock.
The commercial property leasing sector has maintained steady growth in the first quarter of 2022. The multitude of new businesses opening their doors across Dubai has increased rental prices throughout all sectors, creating greater demand for those seeking new premises for their growing businesses.
According to CRC data, the number of leasing transactions is up 7% for Q1 2022 vs Q1 2021, with the highest increase in the warehouse sector, which is 88%.
The overall number of registered tenant leads for CRC increased by 32% compared to the same period last year. In line with the spike in demand, the highest increase came in at 128% for warehouses.
This quarter, we’ve witnessed a continuous demand for commercial property, as businesses that downsized during the pandemic started getting back to bigger office spaces. As well as retail and warehouse businesses benefitting from a surge in demand due to a boost in the economy.
While prices rise and the demand grows, tenants who would previously shop around year on year, in order to secure high-quality units at the lowest price, are opting to lock down long term leases at lower rental values instead.
Seemingly, the trust in the market has bounced back in the first quarter of 2022, with CRC recording a 17% increase in payments with 4 cheques and 1 cheque payments decreasing by 7%.