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Sales of elite offices have pulled the UAE office real estate sector to pre-pandemic levels

Sales of elite offices have pulled the UAE office real estate sector to pre-pandemic levels

The beginning of 2022 demonstrated two changes in the economy of the Arab Emirates at once: a noticeable increase in the level of business activity in the country, which reached 54.8 points in March this year, combined with a significant increase in foreign investors and buyers.

Large international companies are returning to the market again, a new business is being opened in the possession of investors from the USA and Canada. Investments from China are becoming increasingly important.

Thus, in the residential real estate sales sector, Russian buyers broke out from seventh to fifth place in the ranking of the largest categories by nationality. At the end of the first quarter of 2022, in annual terms, the number of real estate transactions by European citizens increased by 67%.

Returning to business activity, businesses and investors needed new commercial spaces to carry out their activities. Premium office spaces have become the main object of interest for these buyers.

The latter is due to the fact that since the beginning of the pandemic, the commercial real estate sector has been stagnating. The almost non-existent growth, determined by the absence of a noticeable customer base, forced sellers to lower prices even for the most elite objects noticeably below their justified cost.

Of course, for a returning or newly formed business, the current situation has become an ideal moment to compete for the purchase of the highest quality objects on the market, while their cost is relatively low.

So, in the first quarter of 2022, analysts recorded that of the 27 main areas of office real estate sales in Dubai, in five of them, the figures have already exceeded the figures before the pandemic (approx. at the end of 2019).

Considering that until recently, developers did not have high hopes for the commercial sector, the supply of real estate, especially premium, was extremely limited. In the course of a sharp increase in demand, it was quickly depleted and prices for all objects in the sector began to grow rapidly.

So far, an extremely modest number of projects for the commercial sector are in the production pipeline. The main attention of companies at the moment is focused on the residential sector, and in particular — villas.

The general economic recovery of the UAE, the growth of business activity, is also helped by the recent rise in oil prices. Business will continue to arrive in the country, but what the commercial sector expects and how soon construction companies will take up its filling is an open question.

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