Property developers in Dubai Pivot: Embracing Rental Residences as Off-plan Market Matures
Dubai, UAE – Amidst a period of stabilizing property sales, some Dubai developers are considering a strategic shift, exploring the creation of new residential units for rental purposes rather than solely for sale.
This potential transformation in strategy is driven by a maturing off-plan market and a robust rental sector poised for another strong year of gains.
Saeed Mohammed Al Qatami, CEO of Deyaar, on the Shift in Focus
According to Saeed Mohammed Al Qatami, CEO of Deyaar, developers are contemplating a mix of selling and renting properties to sustain growth.
“For developers, having a mix of properties to sell and rent out will help sustain the growth of the last two, three years,” he remarked.
Deyaar, listed on the Dubai Financial Market, aims to establish a residential rental portfolio worth up to Dh1 billion over the medium term.
Property Developers in Dubai Strategic Move to Boost Recurring Income
Al Qatami emphasized the importance of boosting “recurring income” prospects, indicating that a rental portfolio aligns with this strategy.
As Dubai off-plan price gains show signs of slowing down, developers seek alternatives to enhance their long-term financial viability.
Pre-emptive Measures and Market Dynamics
Other developers are also contemplating this shift as a pre-emptive measure against any potential slowdown in the property market cycle.
Renting out properties offers clarity once the project is complete, avoiding prolonged periods of unsold units, which could have corporate tax implications.
Impact on Rental Market and Competition
With Dubai rents witnessing a surge of 15-35% in high-demand locations, developers entering the residential leasing space could intensify competition for individual landlords and investors. The move could potentially disrupt the current dynamics where landlords have been in control for the past two to three years.
Looking Ahead for Deyaar
Deyaar, known for projects like the 70-storey ‘Regalia’ skyscraper and the Midtown community development, is experiencing a successful run.
Regalia, over 50% complete, offers luxury apartments with prices exceeding Dh14 million, while Midtown has become a sought-after choice, with two-bedroom units averaging around Dh1.5 million.
Future Outlook for Dubai Property Market
Al Qatami believes the Dubai property market has ample room for growth, fueled by residents and property owners seeking homes.
Moreover, The market’s fundamentals remain strong, presenting developers with opportunities in both off-plan sales and rentals to meet their bottom-line objectives.
Lastly, if you are Looking to invest in Dubai’s dynamic real estate market? contact us
