* Hotel, retail, residential sectors boosted by unrest
* Global economic woes to hit demand for offices
* Residential prices seeing recovery in some areas
By Jason Benham
DUBAI, Sept 26 Dubai's hotel, retail and
residential real estate sectors are enjoying a boost from the
emirate's "safe haven" status amid unrest elsewhere in the Arab
world, a report said on Monday.
The Arab Spring, which has resulted in the downfall of
leaders in Tunisia, Egypt and Libya, has confirmed Dubai's
position in the region, property consultancy Jones Lang LaSalle
"This stimulus has helped push the hotel and retail sectors
into the recovery stage of their market cycle over the past six
months, while selected sectors of the residential market are now
recovering," the report said, adding that the office sector had
seen the least benefit.
Dubai's property sector was hit hard by the global financial
crisis, with residential prices plummeting as much as 60 percent
while billions of dollars worth of projects were put on hold or
Jones Lang LaSalle said that although residential rents and
prices are not increasing across the board, some areas are
"Interest from those displaced by the Arab Spring or looking
for safe-haven residential properties in Dubai is reported to be
particularly strong for upmarket villas in iconic projects such
as Palm Jumeirah," it said.
Recovery in demand however could be delayed by slowing
growth in the United States and Europe and further supply
Jones Lang LaSalle said a further 5,000 homes expected by
the end of 2011 and as many as 27,000 next year could exaggerate
oversupply and delay a price recovery.
An increase in villa prices seen in some areas in the
emirate is unlikely to spill over into the broader residential
market in 2011 and the chance of any recovery in 2012 will
depend on the rate of economic growth and end-user demand for
Dubai residential property.
Prices continue to see further declines in many parts of
Dubai, it added.
For office space, caution among occupiers will have a
negative impact, but demand should increase over coming months
if economic turmoil does not turn into a double-dip recession,
the report said, adding that some firms had already started to
Office vacancy rates remained unchanged in the third quarter
at 44 percent on a city-wide average basis, it said.
More than 1.3 million square meters of office space is under
construction and could be delivered by the end of 2013, adding
to a total stock of around 5.9 million square meters by year
end, it added.
Tenant-favourable conditions in Dubai's retail sector --
such as shorter leases and rent-free periods -- are likely to
continue for the remainder of 2011, the report said.
Dubai, famed for its lavish hotels, is expected to see
rising tourist numbers in the short term after a 10 percent rise
in 2010, it said.
"During 2011, Dubai has experienced heavy visitation in the
wake of the socio-political uncertainties that has made such
destinations as Egypt and Lebanon less attractive."
Hotel occupancy rates have begun to increase after remaining
relatively stable at 71 percent on average during 2010, it
(Editing by David Holmes)