The Essential Guide to the Dubai Real Estate Market (Routledge International Real Estate Markets Series)

This is the first book to fully present, analyse and interpret the Dubai real estate market. Dubai is fast becoming one of the world’s most attractive places to invest in real estate and this book examines the market from three interlinked sectors that drive its performance: occupiers, investors and developers. It examines the market’s historical growth and lays the foundations to examine future trends. The book provides a synopsis of Dubai’s market practices, economic trends and social change that impacts the value of real estate. Chapters also debate issues such as property investment, house price performance, local valuation practices, spatial planning, the economics of the city, market practices and regulation, property-led economic growth and future trends such as sustainability and digitalization. This book offers a comprehensive, in-depth and up-to-date account of the Dubai property market and presents a full assessment of the investment potential of Dubai real estate. It is a must read for students, academics and real estate professionals interested in this fascinating real estate market that has implications for both Dubai and wider GCC markets as well as the international investment market and senior professionals who come to work in the region. This is the first book to fully present, analyse and interpret the Dubai real estate market. Cover 1 Half Title 2 Series Page 3 Title Page 4 Copyright Page 5 Dedication 6 Table of Contents 8 Preface 13 Acknowledgements 18 Part A: Contextualizing the Dubai Real Estate Market 20 1 How did Dubai Become a Leading Global Real Estate Market? 22 Brief Historical Development: The Economic Forces that Shaped Dubai 22 Economic growth in Dubai ( Modern Era) 27 Macroeconomic History of Dubai in the 21st Century (2000–2021) 30 Interlinkages Between the Macroeconomy and Real Estate 33 Dubai’s Urban Development Path 35 “Why so High in Dubai?” 36 Dubai: The New Global City? 37 Dubai 2040 and What the Future will Look Like? 38 Towering Ambitions: Dubai’s Polycentric Growth 39 Conclusions 45 2 Property Market Activity 49 Real Estate – The Global Context 49 Key Characteristics of Dubai’s Real Estate Market 51 Current Property Market Performance in Middle East and Dubai 53 The Impact of Iconic Towers and Property Investment Activity 59 How can Property Investors Invest into Dubai’s Property Market? 63 How are Property Purchases Financed in Dubai? 63 How is Commercial Real Estate Priced? 65 Buying Residential Property in Dubai: An Example Appraisal 68 Conclusion 73 Part B: Analyzing the Dubai Property Markets 76 3 Residential 78 Introduction: The Dubai Residential Property Cycle 79 How Leverage Impacted the Dubai Residential Market Pricing? 82 Dubai Mortgages: An Introduction 89 Fixed- or Variable-Rate Loans 89 Conventional Mortgage vs Islamic Mortgage 90 Lending Restrictions for Foreign Nationals in Dubai 90 Prepayment of Mortgages in Dubai 91 Calculating the Full Cost of Borrowing in Dubai 91 Cash (Unleveraged) vs Mortgage (Leveraged) Purchase Analysis 92 Conclusions 94 4 Building a Global Residential Portfolio with Dubai Real Estate 96 Key Drivers of Property Investment in Dubai 96 Key Barriers to Property Investment in Dubai 98 How does Investing in Real Estate Compared to other Asset Classes? 100 Why Dubai Might help Diversify your Property Portfolio? 101 How do Investing in Equities and Real Estate in Dubai Compare? 104 Managing Currency Risk When Property Investing in Dubai 104 Conclusions 106 5 Commercial 108 Commercial Property as An Investment 108 Property Transactions in Dubai’s Commercial Market 110 Main Participants in Dubai’s Commercial Property Market 118 Drivers of Commercial Property Investment Returns in Dubai 118 Commercial Yields in Dubai 118 Availability of Data 120 Availability of Suitable Quality Stock 121 Institutional Requirements and Key Drivers of Commercial Property Investment 123 What is the Future Outlook for Institutional Investment in Dubai? 124 Indirect Real Estate Investing in Dubai 128 What Options do Investors have to Gain Exposure to Commercial Property Markets in Dubai? 129 Key Characteristics of Listed REITs in Dubai 129 Was it a Step in the REIT Direction for Dubai? 132 Conclusions 132 Part C: Professional Practices 134 6 Sale, Purchase and Leasing Practices in Dubai 136 Estate Agency in Dubai: Law and Practice 137 Private Treaty 138 Tender 139 Auction 139 How to Buy a Property in Dubai? 140 Freehold vs Leasehold Interests 142 Leases in Dubai 145 Lease Registration in Dubai 147 What Constitutes a Lease in Dubai? 148 Landlord and Tenant Obligations 150 Assignment and Sub-leasing 152 Managing Rental Increases 152 Managing Rental Disputes 153 Conclusions 153 7 Managing a Global Commercial Real Estate Portfolio in Dubai 156 How do Firms in Dubai Decide where to Locate and How Much Space they Need? 158 How do Leasing Costs for Corporate Occupiers in Dubai Compare Versus International Markets? 159 Own vs Lease in Dubai? 165 Conclusions 171 8 Property Data 173 Historic Data Availability and Performance Measurement Indicators 173 Why is Transparency of Data Important? 174 Market Maturity and Transparency 177 Defining Market Maturity in Dubai 178 The Evolution of Market Transparency in Dubai’s Real Estate Market 181 What Real Estate Data are Currently Available in Dubai? 185 Case example: Using DLD Transactions to Value a Residential Apartment in Dubai 190 How are Averages Reported in Real Estate? 192 Conclusions 193 9 Property Valuation, Methods and Techniques 196 Valuation Regulation in Dubai 196 Valuation Standards Operating in Dubai 199 Undertaking a Basic Valuation in Dubai 204 How do We Value real Estate in Dubai? 204 Dubai as a Proponent of the DCF Method 209 What Key Variables do you Need to Consider when Valuing a Commercial Property in Dubai? 213 Evaluating Risk in Property Valuations in Dubai 215 Key Differences on the Valuation Approaches Between International Markets and Dubai 217 Case example 1: Valuation of Residential or office Building (Freehold vs Non-freehold Area, Single-owned, Full Tower) 217 Case example 2: Valuation of Industrial Property 219 Case example 3: Valuation of Retail Property 219 How do Dubai Property Valuations Compare to Other Global Markets? 219 The Future of Real Estate Valuations in Dubai 226 Market Impacts 227 Stakeholder Engagement 227 Technology Adoption 227 Conclusions 228 10 Real Estate Development Processes in Dubai 231 Developer Regulations in Dubai 233 Development Within a Master Development 236 Development Within a free Zone 238 Development in Isolation 238 Development Regulatory and Statutory Authorities in Dubai 239 Dubai Municipality 239 Dubai Development Authority 239 Dubai Land Department 239 Other Important Statutory Authorities 240 How to Evaluate Development in Dubai? 247 Residual Land Valuations: The Basics 247 What Techniques are used in Development Feasibilities? 247 Case Study: Prime Residential Plot: for Sale (DIFC, Downtown Dubai) 251 Development Appraisal and Assumptions 252 International Comparisons with Dubai 254 Key Issues Affecting Development Feasibility in Dubai 257 Conclusions 259 Part D: Future Directions 262 11 Sustainability 264 What are the Global Challenges? 264 The Evolution of Sustainability in Real Estate 266 How are Developers Impacting Sustainable Development in Dubai? 269 Sustainability Metrics and Assessments in Dubai 270 The future: Can we Create new Sustainable Business Models for Dubai? 276 Conclusions 278 12 The Future of Dubai as a Smart City 281 Contextualizing Smart Cities 282 The Size of the Smart City Market and the Impact of Market Dynamics 283 The Challenges 284 Cross-Regional Collaboration: Dubai Leveraging its Position 285 Smart City Development Pathways and the Importance of People-Centricity 286 Dubai – The World’s Happiest City 287 Happiness Drivers 287 Drivers of City Residents’ Satisfaction and Happiness 288 Measuring Happiness – Dubai’s Government’s Interaction Feedback 289 Moving Towards a Balanced set of Smart city Drivers and Enablers 289 Smart City Drivers and Enablers 290 Drivers and Enablers of Smart Cities 291 Dubai’s Future-Focused Strategy 293 National-, Governmental- and City-Level Initiatives 294 Sector-level Initiatives 296 Education and Cultural-Level Initiatives 297 Community-Level Initiatives 298 Opportunities for Differentiation 299 Decarbonization 300 Strategy Harmonization 300 Global Networks and the City-as-a-Platform 301 Sector, Skills and Workplace Transformation 302 The Emergence of New Physical Spaces – What will Dubai Look like in 50 Years? 304 Conclusions 305 Index 310 GCC;,Regulation;,Letting;,Market,practice;,Property;,Automation;,Real,estate;,Blockchain;,Industrial;,Middle,East;,Investment;,Finance;,Islamic,finance;,Valuation;,RICS;,Gulf;,Leasing;,Sales;,Corporate,real,estate;,APC;,Proptech;,Housing;,Retail GCC,Regulation,Letting,Market practice,Property,Automation,Real estate,Blockchain,Industrial,Middle East,Investment,Finance,Islamic finance,Valuation,RICS,Gulf,Leasing,Sales,Corporate real estate,APC,Proptech,Housing,Retail "This is the first book to fully present, analyse and interpret the Dubai real estate market. Dubai is fast becoming one of the world's most attractive places to invest in real estate and this book examines the market from three interlinked sectors that drive its performance: occupiers, investors, and developers. It examines the market's historical growth and lays the foundations to examine future trends. The book provides a synopsis of Dubai's market practices, economic trends and social change that impacts the value of real estate. Chapters also debate issues such as: property investment, house price performance, local valuation practices, spatial planning, the economics of the city, market practices and regulation, property-led economic growth and future trends such as sustainability and digitalisation. This book offers a comprehensive, in-depth and up-to-date account of the Dubai property market and presents a full assessment of the investment potential of Dubai real estate. It is a must read for students, academics and real estate professionals interested in this fascinating real estate market that has implications for both Dubai and wider GCC markets as well as the international investment market and senior professionals who come to work in the region"-- Provided by publisher