By focusing on innovation and creativity, Dubai is strengthening its millennial appeal and reinvigorating its property market.
Gone are the days when you just needed an office. Now businesses are looking for space to operate that will give them a competitive advantage and, for this, developers will need to adapt to remain competitive. In addition, for corporates, having the right premises is a way to attract the right talent for future growth.
Dubai’s market recovery in 2012 was largely led by the tourism industry. Following the outbreak of Arab Spring in early 2011, traditionally popular Middle East destinations like Cairo lost their appeal amid heightened security concerns. Dubai’s safe haven status, aviation hub, world-class hospitality and retail offerings meant it was well placed to benefit.
The residential market reached peak performance in 2013 when it was announced Dubai would host Expo 2020, fuelling speculation on its impact on job growth and tourism. High-profile schemes such as the Mohammed Bin Rashid City further buoyed confidence, as witnessed by project launches that continue into 2017.
In commercial real estate, there was continued improvement by the Real Estate Regulatory Agency, which will help improve confidence and therefore investment in the sector. Improving the perception of Dubai’s real estate market is important for growth beyond Dubai Expo 2020.
Coupled with this emerged a rebranding strategy to shake off Dubai’s negative image following the downturn. Dubai positioned itself as the front-runner of creativity and innovation, while government funding has encouraged a favourable environment for artists and entrepreneurs to set up.
Technology’s impact on Dubai’s real estate market and economy extends far beyond the polished concrete floors and exposed ductwork of offices housing tech firms. With increasing numbers of consumers turning to e-commerce, more consumer goods can be found in warehouses than in retail stores.
As demand for space increases, warehouses are being built with larger footprints and higher clearance heights than ever before. And many industrial occupiers are now conducting multiple operations under one roof, such as store inventory replenishment and online sales fulfilment.
As Dubai hopes to attract tech-savvy individuals through new initiatives, developers have realised the need to develop real estate that caters to a range of consumer and corporate income levels to remain competitive. A review of the current market supply of residential product versus upcoming projects reveals that developers are reducing the size of apartments in order to make them more affordable.
Although there is a range in the quality and pricing of offices, this does not necessarily mean that it meets occupier requirements.
Specifically designed hubs such as Dubai Media City and Dubai Design District (d3) offer creative spaces as well as learning opportunities (short term programmes from the University of Arts, London) aimed at attracting a young and creative generation. In turn, it is hoped this will drive the retail market with the growth of SMEs in the city.
The second phase at d3 will be suitable to foster and harness this talent, as well as organically grown hubs such as Al Serkal.
In early 2016, the Dubai Chamber of Commerce and Industry together with IBM launched the Dubai Digital Entrepreneurship Hub to support technology start-ups in the emirate. Similar efforts include AstroLabs Dubai, the only Google tech hub in MENA.
There are expected to be further hubs, as momentum gains pace.
Of course there is The Dubai Expo 2020, which will be a global launch pad for Dubai to shine and show its achievements. With the focus being an opportunity for the advancement of ideas, a celebration of global connectivity and a catalyst for change, the effects will be a lasting and tangibly beneficial one.
The site has already been earmarked to host research and academic institutions, an exhibition centre and a technological cluster all with the aim of providing a springboard for new technologies and industries.
The writer is a Partner — Commercial Leasing at Knight Frank.
