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1、Middle East Real Estate Predictions2024|Dubai market review10th Anniversary Edition 02Deloitte Middle East Real Estate Predictions|202403Deloitte Middle East Real Estate Predictions|2024ContentsExecutive summary 04Dubai real estate market performance Hospitality market 08Residential market 10Office

2、market 12Retail market 14Industrial and logistics market 16Middle East Real Estate market trends 18Key contacts 2604Deloitte Middle East Real Estate Predictions|2024The Dubai real estate market performance has been robust across all sectors fueled by the preferred safe haven status of the Emirate,am

3、idst geopolitical and economic headwinds in other global investment markets.Key economic and demographic statistics also indicate growth compared to the previous year.As of June 2023,Dubais population has crossed 3.6 million,marking a 1.4%year-to-date increase compared to the prior year.The number o

4、f tourist arrivals also saw an increase of 19.9%from January to November 2023,reaching 15.4 million tourists.Moreover,the gross domestic product(GDP)for the first half of 2023 exhibited a growth of 3.2%,totaling AED 223.8 billion.Among industries,the transport and storage sector notably outperformed

5、 others,experiencing a 10.5%expansion during this period.Executive summary05Deloitte Middle East Real Estate Predictions|2024HospitalityThe hospitality markets recovery strengthened throughout 2023,as key performance indicators tracked higher than the previous year,including total visitor numbers wh

6、ich surpassed pre-pandemic levels.FY 2023 occupancy in Dubai averaged 77%compared to 72%for the same period in 2022,while the average daily rate(ADR)over this period has increased by 0.2%Y-o-Y to AED692.This is higher than the majority of the regional and international markets.OfficeOffice rents hav

7、e exceeded pre-pandemic levels,registering an increase of 17%in 2023 compared to the same period last year.The forecasts for economic growth in Dubai and continued initiatives for ease of doing business are positive factors for the office market performance going forward.Industrial and logisticsWare

8、house rents in Dubai rose Y-o-Y,driven by strong demand from various industries including manufacturing,third-party logistics(3PL)and e-commerce.Growth opportunities are expected to continue for industrial properties in Dubai,supported by economic forecasts,particularly with the expansion in the tra

9、nsport and storage sector,which outperformed other sectors during the first half of 2023.RetailMalls continue to be the dominant retail format in Dubai,persisting despite the global surge in online shopping.This is largely due to preference among tourists to visit retail and leisure destinations.The

10、 outlook for Dubais retail sector remains optimistic with retail sales projected to grow by 6%between 2025 and 2027.ResidentialThe residential market has sustained an upward trajectory,marked by unprecedented transaction levels in 2023 along with an increase of 18%and 26%Y-o-Y for sales prices and r

11、ents respectively as of 2023.Villa price growth has outpaced prices for apartments,while rent growth has moved in tandem when compared to pre-pandemic levels.This trend is expected to continue during 2024,albeit the pace of growth may stabilise further as new supply is launched.06Deloitte Middle Eas

12、t Real Estate Predictions|2024The hospitality markets recovery strengthened throughout 2023,as key performance indicators tracked higher than the previous year,including total visitor numbers which surpassed pre-pandemic levels.Dubais hospitality marketReview of 2023 performanceDubai welcomed 15.4 m

13、illion overnight visitors for the first 11 months of 2023,with the highest number of international guests from Western Europe at 19%,followed by Southeast Asia at 18%.International visitors have surpassed pre-pandemic levels by 2%and shown a 20%Y-o-Y growth.In FY 2023,Dubais hospitality sector exhib

14、ited solid performance,with the average occupancy rate standing at 77%,peaking at 88%in February,before dropping to 68%in July.This represents a 6%Y-o-Y increase in occupancy rates,indicative of a rebound in the travel sector,as illustrated in the adjacent graph.ADR remained consistent with the prev

15、ious year,showing only a 0.2%increase,which demonstrates pricing stability amid market recovery.RevPAR experienced a notable 7%rise,particularly with a 23%surge in December due to festive events such as Christmas,the New Year celebration,the Dubai Shopping Festival and favourable weather.This positi

16、ve shift in Dubais hospitality sector performance can be attributed to recent strategic government initiatives aimed at enhancing Dubais appeal as a global tourism hub.0%2%4%6%8%10%RevPARADROccupancy(%)Dubai hotel performance percentage change,FY 2023 vs FY 2022Source:STR GlobalY-o-Y%change from 202

17、26%0%7%07Deloitte Middle East Real Estate Predictions|2024Dubai hotel market performance,FY 202302004006008001,0001,200FY 2023DecemberNovemberOctoberSeptemberAugustJulyJuneMayAprilMarchFebruaryJanuaryADR/RevPAR(AED)Source:STR GlobalADR(AED)0%20%40%60%80%100%RevPAR(AED)Occupancy(%)5%7%-24%15%1%9%8%8%

18、15%9%13%23%7%Occupancy(%)Y-o-Y%Change RevPAR81%88%80%71%79%69%68%70%78%81%85%79%77%7818087107667475474334444184204558049247861,05583765269253629535330628453161662908Deloitte Middle East Real Estate Predictions|2024Post-pandemic recoveryThe FY 2023 data from STR shows all performance metrics are surp

19、assing 2019 levels with the exception of city-wide occupancy.In addition to international visitors,activity from residents has supported the recovery of the hospitality sector in Dubai.ADRs are currently 27%higher than the levels observed in 2019,resulting in a 32%increase in revenue per available r

20、oom compared to 2019 figures.Data from the Department of Tourism and Commerce Marketing(DTCM)shows an increase in the average length of stay,which was 3.5 nights in 2022 and has increased to 4.0 nights over the same period in 2023.UAE Tourism Strategy 2031In mid-November 2022,His Highness Sheikh Moh

21、ammed bin Rashid Al Maktoum launched the UAE Tourism Strategy 2031,aiming to strengthen the position of the UAE as one of the worlds premier tourism destinations.The goal is to enhance the countrys global competitiveness in tourism by attracting an additional AED 100 billion in tourism investments a

22、nd hosting 40 million hotel guests by 2031.The strategy includes 25 initiatives and policies to support the development of the tourism sector in the country,with a targeted GDP contribution of AED 450 billion in 2031,representing an annual increase of AED 27 billion.09Deloitte Middle East Real Estat

23、e Predictions|2024Dubai ADR and occupancy vs regional markets,FY 2023050100150200250300Sharm El SheikhRiyadhMuscatManamaJeddahDubaiDoha CentreCasablancaCairo&GizaAmmanAbu AhabiADR(US$)Source:STR GlobalDubai ADR and occupancy vs international markets,FY 2023050100150200250300350400TokyoSydneyRomePari

24、sNew YorkMadridLALondonHong KongDubaiBeuros AriesBerlinBeijingADR(US$)Source:STR GlobalADR(US$)0%20%40%60%80%100%Occupancy(%)25%84%22%48%7%75%20%3%27%18%24%38%25%94%9%16%25%-46%7%2%13%20%24%12%Occupancy(%)Y-o-Y Change RevPAR(%)ADR(US$)0%20%40%60%80%100%Occupancy(%)Occupancy(%)Y-o-Y Change RevPAR(%)7

25、3%72%71%66%77%77%80%72%73%82%76%72%77%78%57%70%52%59%77%63%63%65%53%56%14680131160188185245198163301360253179172142146104188163124213207858110Deloitte Middle East Real Estate Predictions|2024The residential market has sustained an upward trajectory,marked by unprecedented transaction levels in 2023

26、along with an increase of 18%and 26%Y-o-Y for sales prices and rents respectively.Dubais residential marketReview of 2023 performanceThe average sales prices for residential property in Dubai increased by approximately 18%between 2022 and 2023,reaching AED 1,332 per sq ft.Average rents have also inc

27、reased by approximately 26%over the same period,rising to AED 92 per sq ft as of December 2023.Gross yields reflect 7.2%compared to 6.8%in 2022 as rental growth has outpaced growth in prices.Palm Jumeirah apartments,Dubai South and MBR City were the top three areas for sales price growth Y-o-Y again

28、st Palm Jumeirah Villas,Dubai Sports City and Dubailand which are locations with the highest price declines.By comparison,rent increases were highest in DIFC,Jumeirah and Dubailand Residence complex ranging from 36%to 39%,while the lowest increase was in International City at 8%.Transaction volumes

29、have increased by 29%in 2023 when compared to 2022.Secondary market properties constituted 41%of the total transactions in 2023,with Business Bay,Downtown and Jumeirah Village Circle recording the highest number of transactions.The market continues to be dominated by cash buyers while demand for aff

30、ordable villas and townhouses from residents has driven rental activity in this segment.Villa price growth has outpaced prices for apartments while rent growth has moved in tandem when compared to pre-pandemic levels as shown below.This trend is expected to continue during 2024,albeit the pace of gr

31、owth may stabilise further as new supply is launched.Dubai residential sales prices,Q1 2007 to Q4 2023Price(AED per sq ft)02004006008001000120014001600180020232022202120202019201820172016201520142013201220112010200920082007VillaResidentialApartmentLehman Bros.collapseLast market peakTravel restricti

32、ons andlockdown measures020406080100120202320222021202020192018201720162015201420132012201120102009Dubai residential rents,Q1 2009 to Q4 2023Price(AED per sq ft)Source:REIDINVillaDubai averageApartmentLast market peakTravel restrictions andlockdown measures11Deloitte Middle East Real Estate Predicti

33、ons|2024Dubai residential sales prices by location,Q4 2023Mohammed BinRashid CityAED 1,85320%Dubai SportsCityAED 721-0%Dubai Creek HarbourAED 1,920 14%Dubai LandAED 711-10%Al FurjanAED 9999%Arabian Ranches VillasAED 1,36214%Dubai SouthAED 88426%Jumeirah Lakes TowersAED 1,1349%Source:REIDINNote:Sales

34、 prices are quoted in AED per sq ft with Y-o-Y change in%PositiveNeutralNegativePalm Jumeirah ApartmentsAED 2,37828%DowntownAED 2,41012%DiscoveryGardensAED 62412%BusinessBayAED 1,7783%Palm Jumeirah VillasAED 4,791-1%Dubai MarinaAED 1,5904%International CityAED 5604%MetricApartment rent(AED per sq ft

35、 per year)Apartment sales price(AED per sq ft)Villa rent(AED per sq ft per year)Villa sales price(AED per sq ft)Dubai average rent(AED per sq ft per year)Dubai average sales price(AED per sq ft)2022AED 74AED 1,105AED 70AED 1,302AED 73AED 1,1292023AED 95AED 1,302AED 89AED 1,547AED 92AED 1,332Y-o-Y tr

36、end29%18%28%19%26%18%12Deloitte Middle East Real Estate Predictions|2024Office rents have exceeded pre-pandemic levels registering an increase of 17%in 2023 compared to last year.Demand for Grade A office space remains strong,with premium towers such as ICD Brookfield in DIFC maintaining higher than

37、 95%occupancy.Dubais office marketReview of 2023 performanceOffice rents in 2023 have increased by 17%and have surpassed pre-pandemic levels(2019)by 20%,reflecting Dubais robust position as a preferred destination among global corporations looking for a regional footprint.Despite the introduction of

38、 corporate tax in 2023,the impact on occupier requirements and office market performance has been limited,which remained strong in 2023.The Dubai Government has approved a budget of AED 246.6 billion from 2024 to 2026,with a focus on expenditure for economic growth,social benefits and development.42

39、%of the 2024 budget is targeted at the infrastructure and transport sector,which is expected to increase hiring levels in this segment,while maintaining office space requirements.In response to the increasing focus on sustainability reporting and following the COP28 event hosted in Dubai in December

40、,it is anticipated that commercial buildings in the city may be required to begin measuring climate impact indicators.These include metrics such as electricity costs,losses caused by critical risk events i.e.heatwaves and flooding,and overall scenario modelling for expected operating risks.Global mu

41、ltinational occupiers will increasingly prefer buildings that are LEED certified and/or promote green building design and operations.Despite heightened competition from Abu Dhabi and Riyadh,which are targeting similar regional and international occupiers as Dubai,the forecasts for economic growth in

42、 Dubai and continued initiatives for ease of doing business are positive factors for the office market performance going forward.Dubai employment in financial and business services,2015 to 2023f01002003004005006002023f20222021202020192018201720162015Persons in ThousandsSource:Oxford Economics;Note:f

43、:forecastEmployment-financial and business service-5%0%5%10%15%Y-o-Y change(%)Year-on-year change(%)3%8%12%-4%4%2%3%10%Dubai average office rents,2015 to Q4 202304080120160202320222021202020192018201720162015AED per sq ft per yearSource:REIDINNote:Rents quoted above exclude service charge12512512111

44、711110310211213413Deloitte Middle East Real Estate Predictions|2024Rents are quoted AED per sq ft per yearRents are average achieved rents for shell and core offices exclusive of service charges*Jumeirah Lakes Towers*World Trade Centre/Sheikh Zayed RoadJLT*AED 114TECOMAED 168DowntownAED 255DIFCAED 2

45、70Al GarhoudAED 82Bur DubaiAED 95Al BarshaAED 92BusinessBayAED 134WTC/SZR*AED 145DeiraAED 87AreaDIFCBur DubaiAl Garh-oudDeiraWTC/SZRAl BarshaBusi-ness BayDown-townTECOMJLTDubai aver-age202121682698010975871641677210220222598776831268210520216581114Y-o-Y trend4%9%8%5%15%13%28%26%2%40%17%2023270958287

46、1459213425516811413414Deloitte Middle East Real Estate Predictions|2024The outlook for Dubais retail sector remains optimistic with retail sales projected to grow by 6%between 2025 and 2027.Dubais retail marketReview of 2023 performanceThe retail sector in Dubai is a major driver of the economy whic

47、h can be attributed to a multitude of factors including,increased tourism,government initiatives,Dubais strategic location and a business-friendly environment.Total retail expenditure is expected to expand,projecting a compound annual growth rate(CAGR)of 5.7%from 2022 to 2027.This is largely driven

48、by the expected rise of residents and tourists in Dubai by 2030.The future outlook remains optimistic with retail sales in the UAE and specifically in Dubai expected to reach AED 428 billion and AED 102 billion,respectively,by 2027.This growth is driven by Dubais ability to attract consumer goods co

49、mpanies looking to launch brands and products,particularly in electronics,clothing,and cosmetics/toiletries categories.These trends align with the objectives of the D33 agenda,aiming to elevate the value of domestic demand for goods and services from AED 2.2 trillion in the past decade to AED 3 tril

50、lion in the coming decade,in line with Dubais vision to enhance its vibrant trading sector and diversify the economy.Despite the global surge in online shopping,malls continue to maintain their dominance as the primary retail format in Dubai.This preference is mainly attributed to tourists favoring

51、these retail and leisure destinations.Retail sector trendsIn the post-pandemic world,the dynamics of the retail market have undergone fundamental changes,with digital transformation emerging as a key factor.This transformation necessitates a shift from the traditional retail business model.Shopping

52、malls face two primary challenges:the surge in e-commerce and a shift in consumer preference from product-focused to experience-driven retail.The rapid growth of e-commerce is affecting foot traffic and exerting pressure on profit margins,especially for malls lacking experience-based retail offering

53、s.The digital consumer prefers sensorial experiences over product ownership.The long-term success of operators hinges on their ability to leverage digital technology for uncovering consumer insights and curating a seamless omnichannel experience.Moreover,the pandemic has accelerated the trend toward

54、 flexible retail spaces.Instead of relying on traditional anchor stores,mall operators are catering to changing consumer behaviour by exploring alternative options:incorporating revolving pop-up stores/kiosks,highlighting niche and local retailers,and implementing reconfigurable coworking/shared spa

55、ces.UAE and Dubai retail sales,2018 2027F01002003004005002027202620252024202320222021202020192018AED(Bn)Source:EIUNote:Retail sales(UAE)for 2018/19 are based on actual data while the remaining figures are estimates.Retail sales(UAE)Retail sales(Dubai)Online retail rales0%-9%5%21%6%5%5%5%5%-2%-16%7%1

56、3%11%7%6%6%6%010020030040050015Deloitte Middle East Real Estate Predictions|2024ExperiencesSensoralUniquePersonalisedProduct OwnershipConsumerConsumer behaviour insightsReinventing business modelsDiversificationof revenue streamsOmnichannelexperienceDigital ageTransformationChanging consumer prefere

57、nces16Deloitte Middle East Real Estate Predictions|2024Warehouse rents in Dubai rose Y-o-Y underpinned by strong demand from various industries,including manufacturing,third-party logistics(3PL)and e-commerce.Dubais industrial marketReview of 2023 performanceUAE imports and exports witnessed an incr

58、ease of 6%and 4%respectively Y-o-Y.This moderate expansion is reflected in the high occupancy levels within the Dubai industrial sector.Institutional grade stock is almost fully occupied,and a constrained supply pipeline is supporting rental growth across key warehouse locations.Traditionally strong

59、 markets such as Al Quoz and Ras Al Khor have limited potential for expansion and have recorded strong occupier demand from both existing and new market entrants.Meanwhile,existing occupiers in locations such as JAFZA,Dubai South and Dubai Commercity continue to expand their footprint.UAE imports an

60、d exports,2021 to 2027f01002003004005006002027f2026f2025f2024f2023f20222021US$billionSource:STR GlobalImports US$bnExports US$bn17Deloitte Middle East Real Estate Predictions|2024MetricDWC cargo throughputDXB cargo throughputJebal Ali tonnage throughputRoad freight tonnes2022f1.0 m2.7 m7.15 m31.69 m

61、Y-o-y trend3.0%2.2%0.8%1.9%2023f1.03%2.76%7.21%32.30%Source:Fitch Solutions f:forecastRents are quoted AED per sq ft per year Rents are average achieved rents for purpose built warehouses exclusive of service charges Source:DeloitteDubai average warehouse rents,Q4 2023Dubai key logistics indicators,

62、2022 vs 2023(millions)JAFZA AED 30-35DIP AED 30-35Al Quoz AED 40-45DAFZA AED 80-85Dubai South AED 40-4518Deloitte Middle East Real Estate Predictions|2024Building more sustainable cities with a systems approachWhen it comes to addressing the critical sustainability challenges we face today,cities ar

63、e a crucial part of the solution.On the one hand,adopting the necessary solutions is difficult when cities have such complex and interlinked systems.On the other,a systems approach can provide a more impactful,longer lasting,and,over the long run,less expensive outcome.As we tackle our worlds sustai

64、nability challenges,we need to unpack and understand these systems in order to rebuild them in more sustainable ways.Funding and financial readinessGiven the ongoing stream of giga-projects and the continuation of business as usual developments in the Middle East,financing is emerging as a critical

65、matter requiring attention from project sponsors,executive management and boards.The existing capacity of domestic capital markets and their historic allocations to construction activities will likely be stretched by the scale of demand in the coming years.Consequently,international capital will pla

66、y a crucial role in addressing the funding and financing gap and aligning with wider government strategic objectives to boost Foreign Direct Investment(FDI).Shaping the future of Middle East retailThe retail sector is set for significant growth in the near future.Areas such as online retail,cross-bo

67、rder commerce and direct-to-customer services are expected to emerge as key drivers of this growth for retailers.Additionally,new technology such as generative AI can be implemented across various functions of the business resulting in an increase in the overall efficiency of organisations.Executive

68、 summary Middle East real estate market trends19Deloitte Middle East Real Estate Predictions|2024Cities account for approximately 75%of global emissions1 and produce 10 billion tonnes of waste annually.2 Urban areas have grown at an average of 2%each year from 1990 to 2020,which has led to the loss

69、of biodiversity and natural habitats.3 Around 70%of all food produced is intended for urban consumption,further contributing to deforestation and the loss of natural green spaces.4To tackle these challenges effectively,it is imperative to examine the systems that govern a citys operations,unpack the

70、m and Source:1UNEP;2UNEP;3UN;4FAO;5IEABuilding more sustainable cities with a systems approachCities are a key piece of the puzzle for delivering solutions to the sustainability challenges we face today.understand their functionality.By acquiring this insight,we can rebuild them in more sustainable

71、ways.While numerous different systems dictate daily activities in a city,there are a few that are absolutely critical to determining how sustainable a city is:infrastructure systems,mobility systems,food systems,economic systems,and urban planning systems.Each of these systems present opportunities

72、to reconsider how we manage our cities in more sustainable ways.Infrastructure systemsOur built environment is the most fundamental aspect of our cities.The buildings,utility networks,roads and sidewalks,and public spaces define our lives as urban residents.As one of the most enduring features shapi

73、ng our cities,it is crucial that our infrastructure is constructed in the most sustainable way possible.Transitioning to more sustainable infrastructure designBuildings contribute to 30%of global emissions5;embracing opportunities to decrease emissions across the lifecycle of our buildings is essent

74、ial.This can include using more sustainable materials,adopting smarter heating and cooling systems,and managing maintenance and renovation to reduce wastage.Solutions already exist in all these areas;the challenge will be establishing standards which ensure they are being used.Investing in infrastru

75、cture upgrades and avoiding infrastructure destructionBy older standards,our buildings today are incredibly fleeting.It is imperative to re-establish the importance of building not for a season or a lifetime,but for an age.Using longer-lasting materials and designing buildings to allow for easier up

76、grading over time will be key.Infrastructure systemsUrban planningsystemsEconimic systemsFood systemsMobilitysystemsSustainable cities20Deloitte Middle East Real Estate Predictions|2024Source:6World BankFood systemsEconomic systemsMobility systemsImproving public transportationIn modern cities,a fas

77、t,reliable and cost-effective network of public mobility is essential.Various options such as electric trollies or trams,wider subway networks,or even maglev trains are available.Of course,all these infrastructure expansions will entail emissions themselves,which must be taken into account and mitig

78、ated.However,over time,investment in this infrastructure is crucial.Creating more walkable and bikeable neighbourhoodsThe shift to more localised communities within cities(the 15 minute city concept)is important,but it isnt sufficient on its own to ensure people opt for walking or cycling.Essential

79、factors include efficient spatial planning to establish practical routes,Any city that aspires to become more sustainable must address mobility.This includes private cars transporting individuals from suburban homes to city jobs,lorries facilitating daily product movements,and airplanes connecting c

80、ities.Transforming these local,regional and national mobility systems is vital.Food is one of the most fundamental human needs,making it integral to addressing our sustainability challenges.The severe impacts of climate change,such as droughts,floods,heatwaves and extreme weather,which directly impa

81、ct global food systems,combined with the persistent issue of insufficient food for many around the world,mean that urgent solutions are required.Promoting urban agriculture offers numerous benefits by utilising urban land for farming purposesThis approach can notably reduce or eliminate emissions li

82、nked to food transportation,decrease the environmental footprint of food production on biodiversity and natural surroundings,generate economic prospects for local communities,and enhance access to nutritious food.Actions such as dedicating urban land to agriculture,constructing vertical farms,provid

83、ing financial incentives to urban agriculture enterprises,advocating for individual/family/community vegetable gardens,and encouraging a shift towards more plant-based diets,can all contribute.Efforts to reduce and manage food waste are criticalDespite the fact that 70%of the global food supply is a

84、llocated for urban consumption,a substantial portion ends up discarded.Issues such as inadequate planning,improper storage or packaging,and a lack of concern about food wastage contribute to this problem.Implementing practices like increased composting,establishing food redistribution programmes,dep

85、loying AI-powered food management systems,integrating blockchain for transparent food supply chains and raising public awareness e.g.through green nudging,are existing solutions that can be expanded within cities.Cities drive economic growth,contributing over 80%of the global gross domestic product(

86、GDP).6 However,our economic growth often conflicts with sustainability objectives.The continuous consumption,expansion and extraction to fuel this growth negatively impacts our environment,yet maintaining or enhancing the quality of life for billions worldwide requires economic advancement and equit

87、able opportunities.Reassessing how the economic systems within cities balance these two imperatives is crucial.Valuing natural capital and directing investment accordinglyNational and city-level economic measures such as GDP fail to account for our natural or social capital;business profit metrics o

88、verlook these aspects as well.Adjusting these metricsto incorporate the full spectrum of positive and negative valuecreation becomes essential to steer investments towards areasthat are creating true value.Developing green skills and ensuring an equitable transitionBuilding human capital capable of

89、supporting sustainable transitions is paramount.This begins with educating the younger generation on sustainability,but it also necessitates retraining and upskilling older individuals who are already in the workforce.This approach ensures they can integrate sustainability into their professions and

90、 secures robust economic prospects for those whose livelihoods may be disrupted by the shift towards sustainability.cultivating a comfortable and inviting environment,and prioritising safety to promote walking and cycling as the preferred choices.Shifting to more sustainable private transportAs some

91、 will prefer private transport for convenience,speed or privacy,promoting a complete transition to Electric Vehicles(EVs)will require substantial infrastructure investments and government initiatives to incentivise the change.This includes measures such as reducing or removing tolls,subsidised EV ch

92、arging stations,EV purchase support,etc.Moreover,private sharing options need to be enhanced beyond just traditional ride-sharing.This could include,for example,automated individual car pods which can be programmed to facilitate tasks such as taking an elderly person to their doctors appointment.21D

93、eloitte Middle East Real Estate Predictions|2024Urban planning systemsBring the city closer to natureThis could include initiatives such as creating more city parks,integrating plant life into buildings,and preserving biodiversity within and around the city.Regardless of the solution,additional gree

94、n spaces offer not just aesthetic appeal but also may improve air quality,mitigate urban temperatures,encourage physical activity and enhance mental health.Build greater community engagementMaking a city more sustainable will require individuals to participate in and support the change.Whether it in

95、volves enhancing waste management,adopting more conscientious consumption,opting for the greener transport model,or otherwise living in more sustainable ways,city governments can engage with their communities to build and drive this change.As cities continue to expand,their exposure to climate and d

96、isaster risks also increases.A new approach to urban planning,which embeds sustainability in every facet of the city,is needed.Sustainability should be a core consideration alongside all other decisions made by city governments,balancing the citys needs with the environmental and societal impacts of

97、 those needs.Laura JepsonDirector|Middle East Consulting Sustainability LeadDeloitte Middle EastIn addressing the current climate challenge,cities play a significant role in the solution.Fortunately,numerous opportunities exist for change and innovation.Reimagining the functionality of our city syst

98、ems and enhancing their sustainability will contribute to the well-being,prosperity and satisfaction of urban citizens.Strengthen local resilience and adaptationCities need to protect their residents from the escalating effects of floods,droughts,heatwaves,extreme weather and more.Upgrading infrastr

99、ucture,enhancing disaster response and recovery plans,safeguarding emergency relief budgets and adopting traditional or native environmental management measures,all contribute to cities safeguarding their residents and enhancing resilience in the process.Author22Deloitte Middle East Real Estate Pred

100、ictions|2024Given the ongoing stream of giga-projects and the continuation of business as usual developments in the Middle East,financing is emerging as a critical matter requiring attention from project sponsors,executive management and boards.The existing capacity of domestic capital markets and t

101、heir historic allocations to construction activities will likely be stretched by the scale of demand in the coming years.Consequently,international capital will play a crucial role in addressing the funding and financing gap and aligning with wider government strategic objectives to boost Foreign Di

102、rect Investment(FDI).However,in a highly-competitive funding and financing marketplace,only the most well-developed schemes and structured deals will secure optimal terms.Meeting the level of scrutiny from international institutional investors and lenders will require mature and advanced business pl

103、ans as well as delivery Funding and financing readiness:Navigating the regional and global capital landscapeThis shift will require a change in private sector involvement and FDI trends,with a focus on alternative delivery models and innovative funding and financing solutions,offering a number of be

104、nefits:Unlocking investment:Facilitating mega-projects and driving economic value creation Enhancing equity returns:Maximising returns and enabling the efficient recycling of capital Risk transfer and performance incentives:Instilling accountability,performance incentives and monitoring through priv

105、ate sector partnershipsarrangements.This in turn will support successful outcomes.Achieving these financial and non-financial benefits requires that in-flight projects are future-proofed to meet the demands of international capital.Construction value-add$as a%of GDP(Bn)140CAGR|0.77%ForecastCAGRI|4.2

106、6%120100806040200Source:EIU20162.32.12233.334.594.294.5929290.792.198.6101.9106.4110.6115.1120.2126.820172.32.722.432.23520182.42.722.728.535.820192.52.822.329.335.120202.53.821.529.93320212.53.821.830.233.720222.54.520232.52.722.135.239.32024F2.62.722.737.440.92025F2.72.823.539.342.32026F2.82.824.5

107、41.243.72027F32.925.843.6452028F3.12.92747.446.3UAEKSAQatarKuwaitBahrain22.834.235.323Deloitte Middle East Real Estate Predictions|2024Strategic considerations for achieving market readinessPreparation to attract third-party capital involves addressing internal challenges arising from large,fast-pac

108、ed and dynamic programmes.Some of these challenges include:Business planning maturity:Frequently,business planning frameworks lack clear definition.Even where defined,they might be implemented differently across various segments of a development,leading to difficulties in presenting an integrated an

109、d holistic business plan that meets investor and lender expectations.Single source of the truth:Basic documentation required by investors and lenders may be scattered among multiple individuals,teams or organisations.The absence of a consolidated set of programme assumptions across the development l

110、ifecycle can result in inefficiencies and challenges in maintaining a clear view of the investment case.Integrated planning:Overcoming siloed work practices and managing connections between various inter-dependent aspects of a development e.g.arrangements for the provision of infrastructure assets a

111、nd services.Beyond internal and organisational challenges,meticulous documentation and planning are imperative to meet the standards set by international capital.Key business plan components should be considered early in the development process and consistently refined,including:Demand and pricing f

112、easibility:Demand expectations and pricing strategies for specific assets and services,accompanied by suitable independent evidence,particularly in the context of competing and ongoing developments.Financial feasibility:Strong business plans developed at asset and consolidated levels for funding and

113、 financing,underpinned by rigorous independent costings,and clearly demonstrating sensitivity and robustness to key risks.Clear financing strategy which matches opportunities to capital pools based on their risk/reward characteristics,but provides a clear overall view of the impact of different stra

114、tegic choices.Commercial feasibility:Capacity and capability of the market to deliver the project within set timelines,costs and quality standards.Innovative development schemes and novel construction techniques introduce a variety of market,demand and technological risks that require detailed and s

115、tructured approaches to attract top-tier investors and supply chains.Development feasibility:Phasing and packing of the programme is often a key input to manage peak funding requirements and optimise the requirements for third-party capital.A clear and robust development plan is critical to any inve

116、stors and lenders.Organisational plans:Clarity on corporate structure,governance and operating models.Legal and regulatory framework:Clarity on permits,licenses and property regulations.Strategic delivery:A critical imperative for C-suite leadership A steadfast focus on funding and financing readine

117、ss is becoming increasingly pivotal,beginning from project inception through master planning and asset development phases.Senior C-suite sponsorship is essential to drive this process,mitigating risks associated with the potential requirements of international investors and lenders,thereby enhancing

118、 project delivery.Toby RobinsonDirector|Government and InfrastructureDeloitte Middle EastAuthor24Deloitte Middle East Real Estate Predictions|2024There is not a lot of difference in consumer behaviour across UAE and KSA;however,the trends vary when compared to other geographies in the world.The reta

119、il sector is poised for strong growth in the near future,with online retail,cross-border commerce,and direct-to-customer sales emerging as some of the key growth areas for retailers.Physical retail will remain the dominant channel and as online grows,there will be increased demand for warehouses and

120、 logistics facilities.Source:Deloitte Consumer TrackerConsumers in the UAE felt their finances improved in last one year Consumers in KSA felt their finances improved in last one year Consumers in the UAE are concerned about inflationOf the total money spent by KSA consumers on retail purchasesConsu

121、mers in the UAE are concerned about inflationConsumers in KSA bought low-cost ingredientsConsumers in the UAE are concerned about inflationConsumers in KSA are concerned about inflation77%75%27%30%15%13%48%45%Financial WellbeingInflation ConcernsFood FrugalitySpend on RetailSource:Economist Intellig

122、ence Unit(EIU);Mukatafa ReportRetail sales in UAE,US$billion(2018 2027)76.9278.984.55.489.9CAGR:3.3%201820222027CAGR:6.7%107.19.4116.5Physical retailOnline retailRetail sales in KSA,US$billion(2018 2027)125.41.4126.81402.7142.7CAGR:3%201820222027CAGR:6.4%177.45.8183.2Physical retailOnline retailShap

123、ing the future of Middle East retail25Deloitte Middle East Real Estate Predictions|2024Generative AI has reachedNew technology Generative AIGenerative AI has captured the imagination of a wide spectrum,from school students to C-suite executives.Retailers are also capitalising on this technological w

124、ave.Implementing Generative AI across various business functions can significantly increase the overall efficiency of the organisation.In addition to the above,Sustainability and Environmental,Social and Governance(ESG)as well as People and Leadership are key pillars for retail sector growth in the

125、Middle East.The retail industry and its supply chains contribute to 25%of global greenhouse gas emissions.By managing energy consumption,decarbonising transport and adopting sustainable practices such as circular fashion in the value chain,retailers can enhance efficiencies and align with global bes

126、t practices in sustainability.Meanwhile,the People pillar needs particular attention and it is imperative to lead and motivate colleagues in a time of significant USD 1 billion,in revenue from startups alonePath to 100 millon users0025M50M75M100M2 months9 months30 months41 months55 months 61 monthsM

127、onths from launch102030405060change and challenge.This can include:1.Improving the employee experience:Reimagining rewardstrategies,Diversity,Equity and Inclusion(DEI).2.Future skills:Developing the right skills for future-prooforganisation including Data Literacy and AI.3.Leadership:Embedding purpo

128、se at the core of all leadershipdecision-making.4.Facilities Management:Retailers have large networks ofstores and warehouses and there is opportunity and increasingregulatory and consumer demand to make efficient use ofenergy.Sundeep KhannaPartner|Consulting Marketing&CommerceDeloitte Middle EastAu

129、thorSales and marketing Virtual customer assistants Offer personalisation and personalise ads Video editing and generation Dynamic pricing Autonomous assistants for self-service Summarise content and requestsService Code generation across languages/frameworks/Cloud Service Providers(CSPs)Training on

130、 new technologiesInformation TechnologyFinance and accounting Financial report analysis Budget and return on investment(ROI)analysis Contract summarisation Patent drafting and prosecutionLegal Metaverse 3D workforceup skilling Personal onboarding assistantHuman ResourcesGenerative AILarge language m

131、odels(LLM),text,code,image,video,audio and 3DAugmentAutomateCreatePersonaliseSimulate26Deloitte Middle East Real Estate Predictions|2024Key contactsStefan BurchPartnerHead of Real Estate Deloitte Middle East Oliver Morgan PartnerHead of Real Estate Development and Asset Management Deloitte Middle Ea

132、st Dunia Joulani DirectorHead of Travel,Hospitality and Leisure(EMEA)Deloitte Middle East Manika Dhama DirectorHead of Gigas and Local GovernmentReal Estate Development Deloitte Middle East James Hunt Director Asset Management Deloitte Middle East This publication has been written in general terms a

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