Revitalisation Offers Solution For Dubai Property Depreciation Say Industry Experts

Revitalisation was the solution put forward by experts to tackle the growing challenge of property asset depreciation for many owners, at a recent industry event in Dubai. The panel discussion, organised by international project management and consulting company, Drees & Sommer, and moderated by MEFMA board member Ali Al Suwaidi, discussed the impact of revitalisation on returns on investment in real estate assets.

Over the last ten years, there has been a 74 per cent increase in commercial and residential buildings in Dubai, as well as a 38 per cent increase in hotels and hotel apartment buildings, which has created a highly competitive space for developers. A continuous rise in building standards has also made it more difficult for older properties to remain attractive, further accelerating depreciation.

Peter Prischl, International and Global Head of Corporate Real Estate, Drees & Sommer, explained that revitalisation is the key to increasing the value of properties for developers and landlords: “A building’s value depreciates over time. The rate of depreciation is dependent upon three key quality factors which will have been completed at the start of the project: design, materials and construction. Effective minimisation of depreciation can be achieved through regular maintenance of structure and MEP, as well as refurbishments. However, if we are to achieve renewed ROI, we must undergo a revitalisation project, ideally every 15 years.”