Mixed Bag Results for Dubai

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Unrest across different parts of the Middle East has not signalled any growth in the influx of people who intend to switch base to Dubai.

The worst performing market has been the real estate sector in Dubai. The political unrest in the nearby regions has not yet benefited Dubai.

According to Jones Lang LaSalle, a global real estate services firm, about 44 per cent of the emirates 5.6 million square feet of office space remained unoccupied at the end of the second quarter this year. The home values declined with apartment prices dropping by 1.3 percent and villas by 1 percent.

However, the firm had a positive note on Dubais hotel, retail and residential sectors.

The rents have gone up, especially in sought-after locations such as Palm Jumeirah and Arabian Ranches, by 4 per cent in the second quarter of the year, but the apartment rents had declined by one per cent over the same period.

The Dubai Financial Market Real Estate Index, which is a measure of five developers stocks, is down by 73 percent since mid-2008. Analysts comment, Although the pace of decline has slowed of late, prices have continuously declined for 18 months in a row. They also added that the banks are still wary of lending to real estate and the transaction volumes have remained anemic.

Travel agents reported thattravelerswith holidays booked for Egypt and other Middle East locations has switched to Dubai due to the recentinstability in those regions.

The number of hotel guests in Dubai grew 10.7 per cent in 2010, while Abu Dhabi saw visitor growth of 18 per cent. Not just the regional unrest, but its popularity as a stopover for long-haul flights has allowed Dubai to earn a reputation in the tourism sector.

Source: zawya.com, Bloomberg, gulfnews

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