By: Mahmoud Gamal

Dubai – Mubasher: The real estate sector in the UAE in general and Dubai, in particular, has suffered some challenges lately, however, this has not made the sector any less attractive to foreign and local investors alike, according to Anthony Taylor, head of real estate at ENBD REIT (CEIC) Limited.

Speaking to Mubasher in an interview, Taylor said that when comparing Dubai to other global financial hubs, such as London and New York, the emirate’s property sector appears to be the most suitable price-wise.

The newly-issued royal decrees, whether for visa issuance systems or foreign ownership in companies or even price-control mechanisms, are likely to have a positive impact on the real estate sector, Taylor noted.

Below is Mubasher’s exclusive interview with ENBD REIT’s head of real estate Anthony Taylor.

 

Mubasher: How do you see the performance of the real estate sector in UAE this year?

Anthony Taylor: The sector is facing many challenges due the ongoing negative market sentiment. However, the real estate, hospitality, and retail sectors are the most impacted due to an increase in supply that led to lower house rents and a decline in sale prices.

Investors who can diversify their portfolios have a better position when facing these risks. We expect many promising opportunities in both alternative and commercial properties. As for the first, we are interested in acquiring health, industrial, and educational facilities, which we believe will offer enough flexibility to withstand the current market conditions. As for the commercial properties, we are expecting a mixed performance, with continued demand for high quality and distinguished locations.

 

Mubasher: What are you 2019 projections?

Anthony Taylor: Generally, the real estate sector outlook is neutral after the trends we have seen in 2018. We are still cautious of speculations that indicate an immediate transformation will happen in 2019. We expect commercial rentals and occupancy rates to fall further. However, residential units within ENBD REIT’s portfolio are likely to perform better than the rest of the market. In alternative properties, the education sector is witnessing the fastest growth in private schools worldwide. On the other hand, assets in the health and industrial sectors should be in line with national economic performance and population growth.

Mubasher: Dubai properties are among the most attractive in the world. What are the main characteristics and advantages of the sector?

Anthony Taylor: Dubai is a very attractive destination for living, work, and tourism. This, combined with the population growth and regulatory reforms aiming at attracting investments, have contributed to enhancing the emirate’s position. When compared with other financial hubs, like New York and London, Dubai’s properties are more reasonable when it comes to prices. Regardless of the market volatility, rental yields are more competitive than other parts in the world.

 

Mubasher: Which legislation has had the biggest positive effect on the sector? Which laws does the market still need to see?

Anthony Taylor: The changes in laws governing foreign ownership had the greatest effect on the real estate market in Dubai. It is also anticipated that new rules regarding foreign companies’ ownership, visas, and procedures for controlling rental rates would have positive impacts. These regulations will also help utilise the investment capabilities of expatriates, who comprise the majority of the population, whether in the property sector or in other sectors. More strict legislations regarding developers and selling on maps has helped protect investments and boost confidence.

Mubasher: How do you see the future of real estate investment trust (REIT) funds in Dubai?

Anthony Taylor: REIT funds provide investors with access to bigger real estate assets, whether office buildings, retail stores, student residents,…etc., that they would normally be unable to acquire by themselves. REIT funds are diversified through various kinds of assets with minimal risk, which generate fixed income, which is usually distributed as dividends to shareholders. REIT funds also help in directly managing the appropriation of properties, as well as dealing with maintenance, tenants, rental collection, and other issues.

The Dubai real estate market witnessed many developments in the last 15 years and turned into a stable market with international-level infrastructure. REIT funds are one of those important developments and we would like to see more of them joining the market.

 

Translated by: Mohamed Shokhba