The vibrant hotel sector in Dubai is a major boost to the retail and residential sectors, as these sectors have begun to show signs of resilience amidst the regional unrest. This has reinforced Dubai's position as leading global destination for tourists and investors, revealed a recent report.
The unrest prevailing elsewhere in the region has actually made Dubai as much sought-after destination, with several tourists having re-scheduled their holidays to the UAE, due to volatility in other parts of the region, said the Jones Lang LaSalle (JLL) report.
Although the Dubai hotel sector has been immensely benefitted by the Arab Spring, the retail and residential sectors too, have received a boost over the past nine months.
According to Chief Executive of JLL, Alan Robertson, the current political and economic stability of the UAE will continue to bring in long-term benefits for Dubai real estate market.
However, for a more sustainable recovery, this up-turn will have to be converted into broader economic activity, so as to boost employment sector too, but there is not much happening yet, said Robertson.
According to Robertson, the Arab Spring has made a positive impact on the hotel, residential, and retail sectors of Dubai market. The hotel and retail sectors have been pushed into recovery stage, while the residential market is also improving. The Arab Spring led to stronger performance during first half of the year. But, these benefits may be limited by the fluctuating financial concerns emanating from US and Europe over the past few months.
The JLL report also pointed out that Dubai Airport is currently the fourth busiest airport in the world, reporting year-on-year arrivals of 9.5percent. Dubai hotels achieved an average occupancy rate of 78percent, driven by major increase in number of GCC nationals visiting Dubai. The retail sector also benefitted from the unrest in other parts of the region, as major malls in Dubai recorded increase in traffic and sales activity.
The residential sector too, saw increased demand, as those concerned about stability and security elsewhere in the region, turned towards Dubai. However, this is yet to translate into increased rentals or pricing of houses. The outlook for residential market in Dubai is mixed, with the sector approaching bottom of property cycle. Villas in upmarket locations are clearly performing better than apartments both in terms of sale prices and rentals.
The office sector has been least affected, and continues to be more tenant-favourable, with rentals and selling prices continuing to decline in several parts of Dubai throughout 2011.