Gulf’s Planned and Underway Real Estate Ventures Rise to $1.7 Trillion
Continued Expansion Anticipated for Middle East Property Market in 2024, CBRE Predicts.
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According to a CBRE analysis, the Gulf region’s planned and ongoing real estate projects experienced a significant surge in valuation last year. The combined value of these developments, either in the planning phase or under construction, has reached an impressive $1.68 trillion, CBRE reports.
The real estate market in the Middle East is prepared for continued growth into 2024, driven by robust economic expansion, rising demand, and a constrained supply, as per the CBRE 2024 Middle East Real Estate Market Outlook.
Middle East Property Sector’s Dynamics
Economic growth within the GCC countries presented a mixed picture in 2023, with an average growth rate of merely 0.6 percent, a sharp decline from the 6 percent seen in 2022. This slowdown was largely attributed to a deceleration or contraction in several GCC countries’ oil GDP growth rates, averaging a drop of 3.1 percent. However, this contrasted with an average increase of 3.1 percent in their non-oil GDP growth rates.
Expectations for 2024 indicate a rebound in GDP growth across the GCC, with projections of 2.9 percent overall growth. While oil GDP is forecasted to rise by 2.2 percent, non-oil sectors are anticipated to experience a more robust growth rate of 2.9 percent during the same period. Despite global and national economic challenges, especially in oil-related areas, the non-oil sectors, especially real estate, remain vibrant across the GCC.
By 2024, the total value of real estate projects either planned or currently under construction in the region is estimated at $1.68 trillion, up from $1.38 trillion the previous year. Saudi Arabia represents a significant portion of this value, accounting for 63.1 percent or approximately $1.06 trillion, followed by the UAE with $409 billion, making up 24.4 percent of the total. Bahrain, Kuwait, Oman, and Qatar contribute smaller shares to the overall total.
The heightened investment levels underscore the GCC countries’ commitment to diversifying their economies through the development of the built environment, according to Taimur Khan, Head of Research – MENA at CBRE.
Khan emphasizes the positive economic outlook for the region, underlined by stronger growth and investment inflows, which are expected to support robust demand and performance in the real estate sector.
The GCC’s residential market saw uniformly positive price performance throughout 2023, and this trend is likely to persist with continued split in growth rates. The office real estate sector is anticipated to maintain its strong performance from 2023 into 2024, although challenges such as global economic uncertainties and limited supply in key markets may affect activity levels.
Sector-Specific Insights
– Office Real Estate: In 2023, Bahrain witnessed stable rental rates for Prime and Grade A office spaces, accompanied by an uptick in occupancy and a restrained addition of new supply. The coming year is projected to see a modest decline in rental prices as the supply slightly expands. Resident interest and market performance are expected to remain robust in Saudi Arabia and the UAE.
– Residential Real Estate: The residential sector across the GCC enjoyed uniformly strong price increases in 2023, with a forecast of continued but varied growth in 2024. Notably, the UAE distinguished itself with significant growth in both pricing and transaction volumes.
–Hotel Sector Real Estate: Visitor numbers across the GCC saw an upward trend in 2023, a pattern anticipated to persist into 2024, though distribution will vary by country. The high-end beachfront segments in Abu Dhabi and Dubai are poised for exceptional performance, primarily due to the scarcity of new supply.
–Retail Real Estate Sector: Bahrain experienced a mixed retail market performance in 2023, with expectations of an ongoing occupier-friendly environment in 2024 driven by an increase in supply. In the UAE, the pressing issues are robust demand coupled with a lack of premium stock.
-Industrial and Logistics Real Estate Sector: The sector continued to see demand surpassing supply in strategic GCC areas, with the addition of new supply in 2024 unlikely to lower rental rates. The rate of rent increase is expected to see a slight decrease.
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
Americans now think they need at least $1.25 million for retirement, a 20% increase from a year ago, according to a survey by Northwestern Mutual
This collaboration will extend into the fourth phase of Azizi’s Riviera project in MBR City, with Cummins supplying top-tier power generators.
2 min
Azizi Developments, a prominent private developer in the UAE, and Cummins Inc., a global leader in power solutions design, manufacturing, distribution, and supply, are extending their partnership into the fourth phase of the large-scale Riviera project. Cummins, known for its diverse range of products including diesel, natural gas, electric, and hybrid powertrains, as well as powertrain-related components, like filtration, after-treatment, turbochargers, fuel systems, control systems, air handling systems, automated transmissions, electric power generation systems, batteries, hydrogen generation, and fuel cell products. The manufacturer is globally renowned for its excellence in both innovation and sustainability.
Mr. Farhad Azizi, CEO of Azizi Developments, said: “As we continue our collaboration with Cummins Inc. for the fourth phase of our flagship project, Riviera, we reaffirm our commitment to procuring and utilizing only the highest quality materials. This partnership highlights our dedication to providing exceptional lifestyles for our investors and end-users through the careful selection of premium components. We are confident that our now-broadened alliance with Cummins Inc. will help in maintaining the high standards established for Riviera and further elevate the benchmarks of quality and excellence.”
Riviera is part of Azizi Developments’ award-winning portfolio. It is a stylish waterfront lifestyle destination that comprises 75 mid- and high-rise buildings with approximately 16,000 residences.
Designed to introduce the French-Mediterranean lifestyle to Dubai, which is not merely about architectural art, but also about a certain ‘joie de vivre’ — a celebration of life, an exultation of spirit, Riviera represents a new landmark destination that is both residential and commercial, with an abundance of retail space. Riviera features three districts: an extensive retail boulevard, a lagoon walk on the shores of its 2.7 km-long swimmable crystal lagoon with artisan eateries and boutiques, and Les Jardins — a vast, lush-green social space.
With its strategic location near the upcoming Meydan One Mall and the Meydan Racecourse — home of the Dubai World Cup — as well as Dubai’s most noteworthy points of interest, Riviera represents one of Azizi Developments’ most coveted projects.
Azizi Developments’ Sales Gallery can be visited on the 13th floor of the Conrad Hotel on Sheikh Zayed Road.
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
Americans now think they need at least $1.25 million for retirement, a 20% increase from a year ago, according to a survey by Northwestern Mutual
