Expectations for long term growth for UAE real estate service providers
DATE: June 20 2017
In the past few years the the Dubai real estate market has witnessed a strong change in the way service providers have approached their role.
It is possible to identify two main sides, the tenant side and the Owners side, in respect of which the service providers have changed their business approach.
In the first case, service providers are more and more assuming the set of responsibilities held traditionally by Corporate Real Estate departments, like the management of large lease portfolios, the analysis of occupancy trends and forecasting, becoming always more strategic advisors.
From the Owners side, service providers are answering the Clients need to provide asset management to reach the best yield for investors, being capable of a financial management of the assets, on top the usual property management and bill payments.
The change is bringing the service providers in UAE closer to what are the standard of Europe, North America and Asia.
With a more mature RE market following the crisis in 2008, service providers are seen to being able to add value to investors by looking at the specific activity via a more financially driven approach; once a traditional property management is consolidated.
The UAE service providers market has seen a double digit growth in the past few years and is bound to keep a steady growth in the future. The presence of local and International players has allowed competitive pricing and good level of services.
The success of real estate service providers seems not to be affected by the real estate market price volatility of the past month, if not marginally, creating expectation of long term growth.
The total service providers market in the GCC has been evaluated at 37.7Bn USD, of which UAE count for slightly above 10Bn USD, following Saudi Arabia in second place. Still far from the level of 241Bn USD of Western Europe, the forecast of market growth for UAE Real Estate Service providers is expected at 8.5% CAGR between 2016 and 2021.