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UAE property: Senior, student housing emerging as new niche market

Dubai - A range of government initiatives is expected to support future demand for these relatively untapped market segments, said a researcher.

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Tangible opportunities are emerging in certain segments of the UAE’s real estate sector, such as senior and student housing facilities, providing investors and developers with development opportunities in niche segments, according to new research.

A study by real estate consultancy CBRE has revealed that the UAE senior housing, staff accommodation and student housing offerings are currently in a nascent stage.

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“A range of government initiatives is expected to support future demand for these relatively untapped market segments,” said Abhinav Joshi, head of research for India, Middle East and North Africa at CBRE.

“Millennials are emerging as a key consumer class, with reconfiguration of residential spaces expected as well as increased demand for digitally enabled homes and larger unit sizes to accommodate home offices,” he said.

Due to consistently high supply of units, the UAE has increasingly been a tenant-led market, with occupiers having greater bargaining power and flexibility in negotiating with landlords. Incentives have been seen more and more frequently that include rental reductions and rental payments in multiple cheques, said CBRE in its new report on the UAE real estate market outlook.

The UAE is likely to add around 50,000 apartments in 2020, including 11,600 in Abu Dhabi and 35,000 in Abu Dhabi. The materialisation rate is expected to be much lower and some of the handovers will be moved to next year. In the first quarter, around 3,675 apartments were added in Dubai and Abu Dhabi.

In addition, increased work-from-home options and the Dubai 2040 Urban Master Plan are expected to further accelerate the shift towards green housing, with end-users increasingly motivated to reduce utility costs as they spend more time at home.

Joshi added that key government initiatives, such as new visa schemes, are likely to have an impact on UAE real estate market in the short-to-medium term.

CBRE said retirement and virtual work visas as well as long-term residency visas are expected to help strengthen the UAE’s position as an attractive destination to live, work and retire in.

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The Dubai 2040 Urban Master Plan aims to provide better housing options, increase green spaces and introduce sustainable mobility solutions, ultimately creating new opportunities for investment in infrastructure and helping to deliver this plan, it said.

Moreover, the massive Covid-19 vaccination drive is also expected to give fillip to investor confidence in the local economy and support economic recovery and future growth, it said.

waheedabbas@khaleejtimes.com

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