80% of survey participants report seeing re-purposing of office space, but over half still view the office as essential for a company to operate successfully
Despite, COVID developments there is a recovery in tenant demand across the office sector during Q4
Property experts have seen positive movements in investment trends across commercial property in the UAE during Q4, while owners continue to diversify the way we use office space. This according to the latest RICS Global Commercial Property Monitor.
Across all sectors, investment enquiries rose for the first time since the start of 2015, leading to capital value expectations rising for the year ahead. The strength of the industrial sector continues to edge ahead, with a net balance of +37% of respondents expecting prime industrial values to increase over the next twelve months. The outlook is also positive for prime office values, as a net balance of +30% of respondents foresee an increase during 2022 (the third successive report of growth).
Looking at the alternative sectors, respondents project an uplift in capital value expectations for data centres, multifamily residential, hotels and student housing. However capital values for aged care facilities are likely to rise at a slower rate than in Q3.
As over half of respondents (+51%) believe the market to be in the early phase of an upturn, despite some impact from the latest COVID wave, respondents are more optimistic about the future of the UAE commercial property, with owners in the office sector looking at how to attract employees and occupiers back.
As countries learn to live with COVID, 55% of respondents in the UAE still believe an office is essential for a company to successfully operate. However, 78% of contributors report that they are seeing an increase in demand for more flexible and local workspaces and over half (54%) have reported an increase in space allocation per desk following the pandemic; all highlighting how occupiers are making the office place safe and attractive for employees once more.
But traditional set ups are changing as 80% of respondents are seeing a re-purposing of office space.
Interestingly as UAE office space looks to be repurposed, investment enquiries from the UAE and overseas increased this quarter.
Growth across the industrial sector continues to intensify with availability of units failing to keep up with demand. This quarter, 33% of respondents saw an increase in the number of enquiries for industrial units whilst only +8% reported an increase in availability. This imbalance means that over two-fifths of respondents anticipate industrial rents rising in the coming three months. Industrials are also slightly ahead of other sectors for rental and capital value growth over the coming 12months too.
The retail sector saw its first increase in occupier demand since Q3 2015 this quarter. Investment enquiries also rose this quarter with +18% of respondents reporting a rise in domestic enquiries and +26% reporting a rise in foreign investment enquiries. 32% of respondents report that capital value expectations for the year ahead also improved and it is the third consecutive report where respondents have pointed to further growth in the retail sector.
Tarrant Parsons, RICS Economist, commented: “At the aggregate level, MEA saw arguably the strongest improvement in sentiment compared to all world regions during Q4. Driving this, investment enquiries are now reportedly rising across all market sectors, with Saudi Arabia seeing a strong trend in investor appetite emerging. The turnaround evident within the UAE is also noteworthy, with investor demand now appearing to have more momentum than at any other point since 2014 as the market finally seems to be on a recovery path following a challenging few years. That said, conditions remain difficult across some parts of the region, and the pandemic still of course has the potential to knock confidence going forward if developments were to take a turn for the worse.”
We are RICS. Everything we do is designed to effect positive change in the built and natural environments. Through our respected global standards, leading professional progression and our trusted data and insight, we promote and enforce the highest professional standards in the development and management of land, real estate, construction and infrastructure.
Our work with others provides a foundation for confident markets, pioneers better places to live and work and is a force for positive social impact.
© Press Release 2022
Disclaimer: The contents of this press release was provided from an external third party provider. This website is not responsible for, and does not control, such external content. This content is provided on an “as is” and “as available” basis and has not been edited in any way. Neither this website nor our affiliates guarantee the accuracy of or endorse the views or opinions expressed in this press release.
The press release is provided for informational purposes only. The content does not provide tax, legal or investment advice or opinion regarding the suitability, value or profitability of any particular security, portfolio or investment strategy. Neither this website nor our affiliates shall be liable for any errors or inaccuracies in the content, or for any actions taken by you in reliance thereon. You expressly agree that your use of the information within this article is at your sole risk.
To the fullest extent permitted by applicable law, this website, its parent company, its subsidiaries, its affiliates and the respective shareholders, directors, officers, employees, agents, advertisers, content providers and licensors will not be liable (jointly or severally) to you for any direct, indirect, consequential, special, incidental, punitive or exemplary damages, including without limitation, lost profits, lost savings and lost revenues, whether in negligence, tort, contract or any other theory of liability, even if the parties have been advised of the possibility or could have foreseen any such damages.