The report stated the retail and hospitality sectors performed well in 2011 and 2012 and will do for 2013.
- Prices in premium areas of Dubai are increasing
- Retail rentals and hospitality venues have performed well
- Refinancing debt has improved the outlook
Data from Fitch Ratings has revealed that Dubai’s retail and hospitality sectors have performed well this year and are well placed for 2013.
In the latest report the agency revealed that retail rentals and hospitality revenues have sustained and demonstrated a healthy performance this year and last year whilst having potential for a ‘strong start in 2013’.
Dubai’s retail and hospitality sectors tend to benefit from healthy tourism which was highlighted in the report with the emirate benefitting from the fact that there is unrest in other Middle Eastern locations as people prefer to go to Dubai.
The world is still recovering from the financial crisis and Dubai was one of the places to suffer a property bubble burst in 2008, however, the Fitch report highlights that ‘prices in premium areas of Dubai are now recovering’.
The Fitch report added that prime retail and hospitality companies have been better able to cope with the challenging market conditions than those in the office and residential sectors however, 2012 has seen a vast recovery in the Dubai real estate market with rental and sales prices all seeing an annual increase.
The report added: “The sector’s stable outlook is reliant on the ability of real estate companies to refinance debt, and the main challenge of maintaining performance in light of the over-supply of residential and office space.”
Fitch added that the success in refinancing maturing debt by real estate companies this year and in 2011 has helped to ‘remove the negative bias in the outlook’.
The fact that Dubai is making a continual recovery from the financial crisis and that development is continuing in the emirate means that it is increasingly becoming a safe-haven for investors who are not confident with the European markets.