Dubai is accelerating into the next chapter of its phenomenal growth through a number of key social and business reforms. The leadership will not only solidify the emirate’s position as the preferred centre for business and lifestyle in the region, but also lead to more sustainable growth cycles.
During the 1960s-70s, dredging the Creek, building an airport and developing a considerably sized port, were all seen as risky moves and perhaps overzealous at the time. However, these bold moves have formed the cornerstones of Dubai’s success.
Fast forward 50 years, we are now seeing a Dubai that is consolidating its position as a global hub for trade, financial services, tourism, lifestyle and culture. The city offers an incredibly attractive proposition for both businesses and individuals alike. Whether a multinational company scouting for a new headquarters, or expats looking to begin a new adventure, the emirate remains an extremely desirable location – and this upwards trajectory shows no signs of slowing down.
Dubai is less transient than it once was. Residents’ roots continue to grow deeper. In the first 10 months of 2021, there were 55,000 new company registrations, an influx of 2,000 ultra-high networth Individuals (+ $30 million in net assets) and incredible growth in the premium residential sector. Couple this with the growth in the regional financial services and technology sectors and you have clear indicators of a maturing market. A case in point is the unprecedented take up of office space we witnessed last year. In possibly the most challenging period in history for the global office sector, we bucked the trend having leased over 700,000 sqft of space in just over 12 months from opening.
Numbers to show
Within this case study, I believe we have the blueprint for Dubai’s next wave of demand - a higher quality product for a more discerning end-user. This is true across all sectors of real estate with best-in-class assets showing strong resilience throughout the pandemic and a huge upswing in 2021. This flight to quality will continue and we will see a market that shifts its focus to demand driven by quality, not quantity.
Strong and agile leadership meant Dubai has pushed through the pandemic in stronger shape than when it entered. The wave of new entrants to the market we are seeing from countries like Germany, Switzerland, France, Spain, UK, Hong Kong and the US is astounding. This is substantiated by the quantum of new companies committing to space within our property.
So far 64 per cent (over 450,000 square feet) of the overall take-up has come from new entrants to the DIFC. Prior to the pandemic, real estate locally was mistakenly measured for the most part by dirham per square foot. This focus has shifted considerably, with the end-user undertaking a much deeper level of analysis on the qualitative and quantitative benefits of the asset. The irony of the work-from-home debate is that high-quality workplaces are more relevant than ever before.
Aside from the fundamental tax and tax treaty advantages, the government has worked tirelessly to become more user-friendly with initiatives such as long-term golden visas, 100 per cent foreign ownership, freelance visas, the shift of the workweek to Monday-Friday and some more social reforms such as allowing cohabitation of unmarried couples. The energy of the city is addictive and there’s no limit to what can be achieved here. So, it’s really no surprise that the brightest talents continue to flock here en masse.
Only a question of ‘when’
As the world enters a growth phase coupled with the likelihood of rising taxes in other major centres, it’s no longer a question of ‘why?’ but ‘when?’. Our goal has always been to elevate market standards, particularly around sustainability, technology, specification, property management and place-making.
I’m delighted to see these improvements to local standards are now paying great dividends – demonstrating there will always be a place for prime. As we reflect on Dubai’s mind-blowing accomplishments in this jubilee year, I believe we are reaching a defining point in its history. Through its enhanced lifestyle offering, safe and tolerant community and ample commercial opportunities, we will see this next wave of demand drive Dubai towards its full potential.