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Dubai climbs 3 ranks to 36 in Global Real Estate Transparency Index

November 16, 2020

Dubai, UAE

Dubai’s real estate sector climbs 3 ranks to 36 in Global Real Estate Transparency Index 2020 and the top raking in the Middle East, issued annually by Jones Lang LaSalle, the global real estate advisory.

Real estate sector’s contribution to Dubai’s Dh407 billion Gross Domestic Products (GDP) reached Dh29.4 billion or 7.2 percent of the GDP in 2019, with a growth rate of 3.3 percent compared to 2018, according to a latest report by Dubai Land Department, the emirate’s land and property registry.

Global Real Estate Transparency Index (GRETI) 2020 provides a reliable measure of real estate market transparency and is a useful indicator of a city’s overall ‘real estate investment health’.

“In this year’s edition, the index reveals the increasing attractiveness of Dubai as an investment hub within the region. The city climbed up three ranks (36th) to maintain its position as the most transparent market in the Middle East,” Jones Lang LaSalle (JLL) said in its report.

The total value of real estate transactions in Dubai grew 2.1 percent to Dh226 billion in 2019, compared to Dh221 billion in 2018. The value of both sales and mortgages, recorded 5 percent increase to Dh81 billion in 2019, compared to Dh77 billion in 2018, and the value of real estate mortgages reached Dh125 billion in 2019 compared to Dh120 billion in 2018, with a growth rate of approximately 4 percent, according to Dubai Land Department (DLD).

In terms of volume of transactions, DLD said, it has recorded 8 percent growth in the number of real estate transactions in 2019 to 57,000, compared to over 52,000 real estate transactions in 2018. In terms of investment, DLD recorded an 18 percent jump to 47,000 number of real estate investments in 2019, compared to 40,000 in 2018. The number of real estate investors increased 14 percent to 3,000 in 2019, compared to 29,846 in 2018 with 29,846 investors.

More than 17,000 housing units were added to the real estate sector in 2019 varying between units, villas, complexes, buildings and residential lands with a total area of approximately 4 million square meters, compared to 10,996 residential properties in 2018 from the completed projects according to the end date of the project with a total area of approximately one million square meters.

Investors from India topped the list of investors in terms of nationality with 5,426 investors, followed by the UAE with 5,172 investors, and the KSA, China, and the UK with 2,198, 2,096 and 2,088 real estate investors respectively, followed by Pakistan, Egypt, Jordan, the USA, and Canada.

In terms of real estate projects, a total of 1,894 projects were registered with DLD in freehold areas, 814 of which were completed and 314 under construction. In 2019, 70 real estate projects were registered with DLD, while 14 were registered in H1 2020. Of the projects registered in 2019, 69 percent were buildings, 24 percent were villa complexes, and 7 percent were villas.

As for the completed projects according to the year of project completion, 78 projects registered with DLD were completed in 2019 in freehold areas compared to 63 projects in 2018. In addition, 314 projects registered with DLD are still under construction up until H1 2020. According to the date of project registration, 53 projects were registered in 2019, compared to 61 in 2018, 75 in 2017, and 45 in 2016.

Thierry Delvaux, CEO, JLL Middle East and Africa (MEA).

“Our GRETI report this year is being launched at a time of massive economic and societal disruption. As governments and businesses recover from the impact of COVID-19, questions around transparency and trust have been bought into even sharper focus,” said Thierry Delvaux, CEO, JLL Middle East and Africa (MEA).

“During times of such uncertainty, the need for transparent processes and accurate, timely data becomes more important than ever. The findings of our report provide reasons for optimism with the current disruption forcing the pace of change.”

According to the report, the most significant initiative launched in 2019, and a key contributor to Dubai’s ranking, was the creation of an official residential transaction-based index, Mo’asher, by the Dubai Land Department (DLD) in partnership with a private sector entity.

Dana Salbak, Head of Research for JLL MENA.

“Mo’asher constitutes a potentially important step forward for Dubai, as it means the establishment of a single index that is widely used by all market participants,” said Dana Salbak, Head of Research for JLL MENA.

Driven by the introduction of further initiatives to promote corporate and real estate sustainability, Abu Dhabi emerged as a top performer globally, reflecting positively on the overall transparency ranking and future investment outlook.

“Among the many initiatives introduced, the UAE Ministry of Climate Change and Environment signed a pledge with the Abu Dhabi Global Market (ADGM), a financial Freezone, to embed sustainable finance policies in the UAE, contributing to the emirate’s ranking.  The policies cover all forms of corporate and investment financial services which yield environmental, social, and economic benefits,” added Salbak.

Other factors include the first Green REIT, established at the ADGM in early 2020 by Masdar, a subsidiary of Mubadala Investment Company and one of the world’s leading renewable energy and sustainable real estate companies.  Beyond sustainability, The Abu Dhabi Digital Authority (ADDA) also unveiled a new Abu Dhabi Data Management Program (DMP), offering a data-centric platform and sharing ecosystem.  This falls under the Open Data initiative as part of Ghadan 21, Abu Dhabi’s accelerator programme, which is designed to fulfil the government’s vision of a diversified knowledge based economy making the Emirate one of the best places in the world to do business, invest, live, work and visit.

According to JLL’s report, Saudi Arabia continues to demonstrate a strong commitment to the implementation of positive reforms to expand the economy and the real estate market. Conscious of the role data plays in market transparency, the Saudi government rebranded its publicly available central database – The General Authority for Statistics – and has continued to collate more data from government agencies. Ministries and government organizations such as the Ministry of Finance and the Saudi Arabian Monetary Authority have also begun to publish more micro-level indicators on a monthly and quarterly basis. Data from the Ministry of Justice has also become a valuable indicator for commercial and residential real estate transactions and performance.

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