A Cut Above: How Developers Can Add Value To Dubai's Real Estate Landscape
The future for private developers who want to thrive in a maturing real estate market is to create a more wholesome or holistic living environment, aligned with the Dubai 2040 Urban Master Plan and its pillars.
Real estate has been known to be a key component in boosting an economy, as it provides business and social infrastructure that allows for an advanced economy to operate. Be it residential or commercial, each sector in real estate contributes in its own way to the economy as a whole.
As an investment, real estate can make up a large part of an individual's wealth. As the economy fluctuates, real estate can be seen as a marker for spending habits. When the economy is low or in recession, there is less of a demand to buy property due to lower disposable income; alternatively, as the economy grows, so does disposable income and a willingness to invest. This is a benefit to every business and resident as it attracts skilled labour, with the real estate sector itself needing more than just engineers, architects and contractors. It also employs legal advisors, financial analysts, surveyors, facilities managers and specialized suppliers, contributing positively to the overall economy.
The boom and recession cycle between 2005 and 2008 was a learning experience for the UAE's leaders, to say the least. Not only did it reinforce the strength and popularity of Dubai as a global city, but it also resulted in the creation of legislation to support the buyers’ interest and make real estate investments a safe bet for international investors. Between 2011 and 2020, further rules and regulations have been put in place, more so for developers, to encourage completion, long-term thinking, and better cash flow management. During this time the market has also moved from an investor-focused product market that dominated five years ago, to an end-user market. This along with mortgage rates being at an all-time low, and supply at an all-time high, has encouraged Dubai residents to invest in their homes.
In terms of the UAE, the real estate sector has seen a boom in recent years, and what Dubai has done since freehold property investments launched is tremendous, with real estate contributing to 7.2% of Dubai’s GDP in 2019. Government-backed developers have taken the initiative to create iconic projects that have helped increase the city's brand value and global recognition. No longer just a transient country where expats come for a few years, the average couple or family are now looking to reside in Dubai for the long term. Furthermore, the way Dubai and the UAE handled the COVID-19 pandemic is second to none. Most people residing in the country realized how lucky they are, and see the benefits of a city with strong healthcare, infrastructure, and agile decision-making.
The government has also put in place a few key initiatives over the last year- these include making healthcare, R&D, and manufacturing a key driver for growth and the Dubai 2040 Urban Master Plan, to make the city more green and connected. All these and other such initiatives will start making a difference over the next three to five years contributing to population growth and its knock-on effects as it relates to real estate demand. Moving forward, the industrial and manufacturing sectors will play a pivotal role over the next five to ten years. A focus from the government on supporting local manufacturing and exports will aim to move Dubai, in particular, from a leading trading hub to a production and export hub, which will help secure the Emirate. Not only will this add value in terms of GDP but will also require a higher workforce, which leads to more spending, more needs for housing, transport, and retail development, to name a few, all of which will continue the growth of the real estate sector.
The future for private developers who want to thrive in a maturing real estate market is to create a more wholesome or holistic living environment, aligned with the Dubai 2040 Urban Master Plan and its pillars. At the same time, the coronavirus pandemic has forced us to rethink how and where we live. Our home is now also our office, classroom, and space to unwind. This new norm has forced developers to adapt, and smaller private developers need to be flexible enough to move away from the standard cookie-cutter developments.
It can no longer be about just building and selling to make a profit but has to be about how people want to live. This could be in the way of better facilities, more livable space, or even better-connected communities.
At our company, ZāZEN Properties, we realized this type of philosophy was missing, especially for the mid-market consumer. The COVID-19 crisis made buyers look for more space, connectivity, better quality, and more facilities, but at ZāZEN Properties, this has been our core concept from inception in 2018. Our first residential project, ZāZEN One in Dubai’s Jumeirah Village Triangle neighborhood, set to hand over in January 2022, is a testament to that. As a brand, we aimed to achieve “a community within a building,” where people can live, play and work without really having to leave. Larger living spaces with fitted kitchens, clean designs with lots of natural light, green building certification, and solar power are all important elements of our design aesthetic. On top of this, the location within the JVT community means better connectivity, with the Al Khail road highway easily accessible, two schools, parks, play areas, sports court, and a new community mall all within JVT. ZāZEN One also boasts world-class amenities such as a temperature-controlled pool, 350-meter jogging track, residents lounge, a private study area with Wi-Fi, a rooftop BBQ, and an entertainment deck, to name a few.
With a stable government, almost negligible tax, and its status as a leading international trade and tourism hub, investing in the UAE is an inviting proposition to maximize opportunities and returns for global funds and investors alike. As an attractive asset class for private and larger institutional investors, the inflow of money into the economy allows for the UAE to remain on the cutting edge of urbanization projects such as with the Dubai 2040 Urban Master Plan. As Dubai and the UAE continue to find unique opportunities to grow the economy through such projects, smaller private developers are able to create niche developments and focus on providing something unique on a smaller scale in line with these initiatives. Through innovation and the ability to manage cash flows more effectively versus larger government-backed developers, smaller developers always have the capability and responsibility to add value to Dubai's real estate landscape for future generations.