The second quarter of 2023 in Dubai’s commercial real estate (CRE) market saw a tremendous increase in sales transactions, which helped the emirate’s real estate sector achieve record-breaking results. In the first half of this year, the sector recorded its biggest semi-annual sales ever.
The CRE market recorded an increase of 22 percent in Q2 compared to the same period last year. “The total transacted value experienced an astounding growth of 101 percent, reaching Dh21.385 billion, signalling the market’s robust expansion,” Behnam Bargh, managing director, CRC, a real estate brokerage, an affiliate of Betterhomes, wrote in Commercial Property Market report.
According to Bargh, Dubai’s office properties exhibited a noticeable improvement, with a notable 49 percent increase in transactions over the prior year. Business Bay, Jumeirah Lake Towers, Jumeirah Village Circle, Barsha Heights, and Dubai Silicon Oasis were the top communities for office sales during Q2 2023, demonstrating the high demand for commercial premises in these regions.
“Dubai’s retail sector also experienced substantial growth, with a 50 percent increase in transactions and a remarkable 94 percent rise in transacted value. Despite a decline in demand for commercial leasing transactions, which experienced a 12 percent decrease compared to the previous year, the demand for commercial real estate remained robust throughout Q2 2023. This surge in buyer demand and transactions signifies a significant interest and confidence from buyers in the market,” said Bargh.
The report noted that Dubai’s appeal as a vibrant business hub, with a strategic location, world-class infrastructure, and dynamic market, remains strong. “Despite leasing market challenges, the commercial real estate sales market exhibited robust growth in Q2 2023. The significant increase in sales transactions and transacted values highlights the strong demand for commercial properties. As investors and businesses seek growth opportunities, Dubai continues to offer a promising and resilient business environment,” said the report.
In Q2 2023, the buyer profile for commercial properties at CRC Dubai displayed an impressive range of buyers, drawing in both investors and end-users. Numerous nationalities showed strong interest in the market, with customers’ top countries of origin emerging as Norway, the UK, and India.
“This indicates the international appeal and global investment interest in Dubai’s commercial real estate sector. The surge in the number of new trade licenses issued, along with the influx of high-net-worth individuals (HNWIs) coming to Dubai and the growing presence of new investors, further demonstrates,” said the report.
The Dubai Land Department reports that in the first half of 2023, 60,440 sales transactions of Dh177.3 billion were reported. The overall amount of real estate transactions in Dubai in the first half of this year totaled Dh252.7 billion, according to the DLD’s report, with the reported value of registered real estate mortgages reaching Dh61.7 billion in the first half and includes grants totaling Dh13.6 billion.