Local and foreign developers in Dubai scramble to secure land as demand surges
Competition among Dubai developers intensifies as available land plots dwindle rapidly.
Prime areas like Downtown and Business Bay are nearing full development, leaving few residential plots available and driving prices higher. Tatjana Lescova and Sapna Jagtiani from S&P Global note the urgency for developers to acquire land, pushing them to purchase at high costs.
To meet unprecedented demand, local developers launch multiple projects and expand their land holdings. Danube Properties alone unveils over Dh10 billion worth of projects in 2023, focusing on key locations like Business Bay and Jumeirah Village Circle.
Binghatti Properties invests Dh1 billion in plots even before issuing a $300 million sukuk, indicating a strategic approach to financing and project development.
Muhammad Binghatti emphasizes the importance of liquidity for rapid project execution and growth.
Foreign developers also enter Dubai’s property market, further driving up demand for land plots.
Beyond Downtown and Business Bay, emerging areas like Maritime City and Jumeirah Village Circle attract developer attention, fueling the competition for plots.
Dubai witnesses a more than 50% increase in plot prices over the past few years, with some areas experiencing even sharper hikes, like Maritime City.
S&P analysts highlight improving financial health among Dubai developers, supported by robust pre-sales and cash collections. However, they caution against oversupply risks that could trigger a market downturn.
Expectations suggest a cooling of Dubai’s residential property market in the next 12-18 months due to increased supply and global economic factors, although developers’ strengthened financial positions offer some resilience.