Booz Allen: Five strategic priorities for UAE’s real estate sector

13 October 2021 3 min. read

UAE’s real estate sector is at a crossroads – rebounding from the Covid-19-dip while having to prepare for a transition to a new, and different future. Bruno Wehbe and Joseph Mazloum, both Vice Presidents at Booz Allen Hamilton in the Middle East, outline five key trends and strategic priorities for the coming years.

Growing alternative segments

From being a stopover destination, the UAE is evolving into a country of choice for long-term stays where families and individuals lay down roots, study, and retire. Aided by expatriate-friendly visa and investor programs, a steady demographic shift is already occurring with old and young dependency ratios at a decade high. 

Developers and investors should explore resulting alternative pockets of demand, such as larger and affordable family housing, student housing, or assisted living facilities for affluent retirees. Other pandemic-driven segments gaining momentum include healthcare and well-being, logistics, digital infrastructure, and biotech. 

Bruno Wehbe and Joseph Mazloum, Booz Allen Hamilton

Asset management to the fore

As in all real estate cycles with subdued development growth, the focus shifts to extracting maximum value from standing assets through rigorous and active asset management. As the UAE’s largest asset owners consolidate and rationalise portfolios like with Dubai Holding’s take-over of Meraas in 2020, the pressing priority is the in-depth management of operating assets and more synergetic re-thinking of uses, especially amidst Covid’s new realities. 

This includes the rejuvenation of mall offerings to a rapidly changing, more local demand, rethinking lifestyle destinations and their digital integration, repurposing under-used offices into alternate uses, and reimagining the hotel experience beyond the room. 

Further reading: Seven workplace trends for the post-Covid world

Double-down on third-party services

As demand slowly recovers, top real estate players have been redirecting their best-in-class capabilities into safe businesses that generate sustainable recurring income, such as fee-based development and operations. One of the regional pioneers in the space, Aldar went all in on such services and reaped immediate rewards from its investor base.

Time for urban regeneration

As the urban sprawl of UAE cities expands, older communities could largely benefit from a push for strategic regeneration, coupled with stronger integration and connectivity initiatives. The recently unveiled Dubai 2040 Urban Master Plan, for instance, seeks to increase population densities around mass transit stations, while boosting green spaces and improving quality of life. 

Developers can benefit from a shift in focus from increasingly remote greenfield opportunities to selective regeneration projects in the historical cores of Sharjah, Dubai, and Abu Dhabi. 

Technology and innovation at the epicentre

With technologies reaching efficient scales, the pandemic boosting the need for connectivity and digital solutions, community developers and operators should increasingly build their products and services around winning technologies.

Some of the most common technologies Booz Allen is seeing in the market include EV charging stations, digital CRM lifecycle services, proptech and smart home solutions, sustainable power generation and integrated utility control services.