How the Nakheel-Meydan merger will shake up Dubai’s real estate market
The merger between Nakheel and Meydan – two of Dubai’s largest developers – under the Dubai Holding umbrella will make the companies more efficient and better positioned to capitalise on soaring demand, property analysts said.
Sheikh Mohammed bin Rashid, Vice President and Ruler of Dubai, announced the move on Saturday.
The conglomerate, owned by the Dubai government, includes Jumeirah Group, Dubai Properties, and Tecom Group.
“I can see that this is a smart move as it will be more efficient for these huge businesses to merge and sit under the Dubai Holding umbrella,” Simon Baker, managing director of Dubai real estate agency haus & haus, told The National.
“This means they will be able to consolidate resources, increase market share and capitalise on synergies to better exploit soaring demand.”
In 2023, Dubai registered a record 17 per cent annual jump in real estate transactions to 1.6 million across market segments, the latest figures from the Dubai Land Department show.
The overall number included real estate deals from investments, mortgages and sales transactions to rental contracts recorded last year, up from about 1.3 million transactions reported in 2022.
Experts also said the merger may lead to a more streamlined delivery of master projects across the city.
For example, the addition of Meraas to Dubai Holding’s portfolio in 2020 had “positive effects” in terms of project quality and delivery, Mark Richards, managing director at Luxury Property, said.
Bluewaters Island and Madinat Jumeirah Living – the two key Meraas projects at the start of the coronavirus pandemic – have “become so popular that it’s rare to find units on the market”, Mr Richards said.
Nakheel’s master developments span 15,000 hectares and include The Palm Jumeirah, The World Islands and Jebel Ali Village.
It also owns retail and hospitality projects including The St Regis Dubai, The Palm and Premier Inn Ibn Battuta Mall. Meanwhile, the Meydan Group’s portfolio includes the Meydan Racecourse, as well as real estate such as Mohammed bin Rashid City.
“Each developer also has its own land banks, and the consolidation of these will result in more opportunities to deliver well-planned master communities,” Mr Richards said. “This merger will allow for infrastructure to be scaled up more easily.”
The Nakheel-Meydan merger is also expected to advance the goals of the Dubai Economic Agenda D33 plan, which was launched in January last year.
I can see that this is a smart move as it will be more efficient for these huge businesses to merge
SIMON BAKER
Managing director, haus & haus
D33 is intended to double the size of Dubai’s economy, with a target of Dh32 trillion ($8.7 trillion) by 2033, and establishing the emirate among the top three global destinations.
The 10-year programme seeks to establish Dubai as the world’s safest and most connected city, as well as making it a home to international companies and investments.
Incorporating Nakheel and Meydan into Dubai Holding aligns with the emirate’s Urban 2040 plan, which aims to revitalise the city’s areas such as Deira, Bur Dubai and Downtown Dubai, Prathyusha Gurrapu, head of research and consultancy at Cushman and Wakefield, told The National.
“[It] helps with Dubai’s vision of being the leading global property market by creating holistic and competitive real estate product offerings across asset classes under the single strong governance of Dubai Holding,” Ms Gurrapu added.
The UAE’s property market is projected to reach $710 billion by the end of this year, with the residential sector accounting for about $410 billion, according to Statista.