CRC, Betterhomes Group company and Dubai’s largest commercial real estate agency, released their 2021 Dubai Commercial Property Market Report, which provides an in-depth overview of Dubai’s commercial real estate.
2021 has been the year of the rebound for commercial real estate after the industry saw numbers hit an all-time low in 2020. Reflecting on this year’s report, Ben Bargh, Director at CRC, said “As we head into the new year, it’s safe to say that 2021 was a major turning point for the commercial real estate market. We have seen positive reforms in Dubai’s economy and as a result, witnessed a rise in both the demand and prices for commercial property, overtaking even pre-pandemic levels.”
“With the market making an almost complete recovery, confidence is building amongst business owners who are increasingly more optimistic about the future of their companies. The desire to secure more extensive and better commercial spaces for longer is becoming an increasingly popular trend.” Ben continues.
After the introduction of new policies in Dubai, including switching the workweek to Monday to Friday to align with the rest of the world, and of course, the ongoing EXPO 2020, Dubai’s economy is making major headway as it navigates its way out of the pandemic, and growth in the real estate market, both residential and commercial, is anticipated to continue into 2022 and beyond.
As the market continues to bounce back, confidence grows among investors, business owners and entrepreneurs, all optimistic about the future of their ever-growing companies. Dubai is becoming even more attractive than before, for those seeking an open environment with minimum restrictions to conduct their business operations.
In 2021, Dubai’s commercial property market managed to navigate the way out of the pandemic, with the total value of units sold in 2021 reaching almost 30.88 billion, up 35% compared to 2020 and the total number of transactions up by 19% totalling 7,179 units.
Office sales more than doubled in 2021, with a 101% increase and Business Bay took the top spot as the most popular community with 166 units sold. Office sales prices also started growing for the first time since 2014, with an average sales price of 785/sqft.
In retail sales, International City has the highest number of transactions in 2021, followed by Jumeirah Lake Towers, Business Bay and Jumeirah Village Circle. It was surprising to see a surge in sales transactions in Mohammed Bin Rashid City, an up-and-coming community that soared to 3rd place with 56 retail units sold in 2021.
According to CRC data, the average number of leasing transactions is up 15% from 2020, with the highest increase in the retail sector, which is up 126%.
The overall number of registered tenant leads increased by 58% compared to the same period last year. In line with recorded leasing transactions, the number of registered tenants in retail is leading the way with a 111% increase, followed by a 60% increase for warehouses and a 47% increase for offices.
Businesses renting offices in Dubai are increasingly opting for bigger well-fitted office spaces that don’t require significant investments and the average size of the offices rented increased by 3% YoY.
A significant number of commercial tenants are trying to lock down long term leases of 2-3 years at lower rental values. As a result, CRC recorded a 7% increase in payments with one cheque.