The UAE’s property sector is set to maintain its positive momentum in 2025, with significant contributions from institutional investors driving its progress.
Experts from Zawya Projects emphasised the growing diversity in investor profiles gravitating toward the region. Matthew Green, Head of Research at CBRE MENA, highlighted the increasing presence of institutional investors.
Over the last year, they have observed a surge in interest from institutional investors targeting the UAE, Saudi Arabia, and neighbouring areas as they explore new opportunities for deploying capital.
This trend reflects a broader diversification effort, particularly from private investors and family offices in Asia-Pacific, who are exploring more stable alternatives amidst China’s slowing property market.
Green noted that this wave of institutional capital has brought about a greater focus on structured project financing. While regional banks remain central to funding, international credit firms are steadily making their mark, hinting at potential shifts in financing dynamics.
There’s been a notable adoption of alternative investment strategies, including joint ventures for speculative projects in office and industrial sectors. These partnerships aim to expand the availability of tradeable institutional assets, particularly Grade A properties.
Despite global challenges, such as tightened liquidity and rising interest rates, the UAE continues to appeal to international investors with its stable economic landscape.
Bas Kooijman, CEO of DHF Capital, observed that global economic pressures haven’t dampened the UAE’s attractiveness. Family offices, in particular, are gravitating toward the region for its tax advantages, stability, and reliable returns in real estate and infrastructure, according to Kooijman.
The involvement of institutional players, Sovereign Wealth Funds, and Real Estate Investment Trusts has further reinforced market stability. SWFs, in particular, are targeting income-generating premium assets for long-term value, solidifying the UAE’s reputation as a hub for progressive investment strategies.
Developer Insights
Farhad Azizi, CEO of Azizi Developments, highlighted strong demand across residential, commercial, and mixed-use projects, attributing it to the UAE’s robust economy and appeal as a global business and tourism destination. According to Dubai Land Department data, a projected 80% increase in unit deliveries is expected by 2025 compared to the previous year.
Azizi also pointed to their flagship ‘Riviera’ project in Mohammed Bin Rashid City, which blends residential, retail, and leisure elements. Luxury projects such as Azizi Venice and Burj Azizi are aimed at high-net-worth individuals seeking exclusive Dubai properties.
To address rising costs and labour shortages, Azizi Developments secures construction materials directly from suppliers, optimising procurement efficiency. Other developers, such as Acube and KASCO Developments, have adopted similar strategies, including early design finalisation to manage supply challenges and cost fluctuations effectively.
Market Outlook for 2025
The UAE real estate market is poised for steady growth next year, supported by favourable demographic trends, strategic government initiatives, and a commitment to sustainable practices.
Kooijman noted that real estate transactions in Dubai surpassed AED 544 billion in the first nine months of 2024, backed by strong regulatory frameworks and infrastructure. He also highlighted a shift from speculative activities toward long-term value creation.
Developers remain optimistic despite external pressures, citing Dubai’s rising population and growing investor interest as key drivers. Acube’s Ramjee Iyer and KASCO’s Mustafa Al-Kaissi both expressed confidence in the market’s continued appeal, with Al-Kaissi noting the growing influence of younger buyers prioritising modern, sustainable living spaces.
Focus on Sustainability
Sustainability and innovation are increasingly shaping new developments. Yogesh Bulchandani, Founder of Sunrise Capital, highlighted the importance of green building practices, flexible spaces, and mixed-use projects. Biophilic designs incorporating natural elements, as emphasised by KASCO, are gaining traction as developers respond to shifting consumer preferences.
As the UAE moves into 2025, its property sector is expected to continue drawing investors and residents alike, thanks to a balanced mix of strategic planning, stable policies, and forward-looking development.
Original article reference: Zawya.
