Need for schools in Dubai and Abu Dhabi a huge opportunity for developers, investors
More than 1,000 schools will be needed in five of the region’s biggest cities by 2020, according to a new report.
Some 1,100 new schools are in required Dubai, Abu Dhabi, Jeddah, Riyadh and Cairo, according to the JLL property consultancy.
It represents a big opportunity for developers and investors, says JLL.
The consultancy said that about 350 schools are expected to be provided by private sector.
The increase is required because the total school-age population within these cities is expected to grow by one million by 2020, according to the report. It argues that 97 new schools are needed in Abu Dhabi and Dubai, with 58 of these likely to be provided by the private sector.
Dubai is expected to need 53 new schools, 36 of which will be provided by the private sector, while Abu Dhabi needs 44 – half of which will be private schools.
Craig Plumb, head of research at JLL Mena, said: “The requirement for around 350 private schools presents significant opportunities for real estate investors, developers and builders.
“The education sector has sparked the interest of many real estate investors right across the MENA region. Private equity firms in particular have been very active in recent years, and they will continue to play a pivotal role in the expansion of the private education sector here.”
Mr Plumb said this was due to a “shortage of quality income producing assets in traditional sectors and declining returns in some locations”.
“Both retail investors and institutions are seeking greater exposure to non-correlating alternative investments that provide consistent income with low volatility.”
A report prepared by Abu Dhabi Education Council (Adec) last year showed that private schools in Abu Dhabi earned close to Dh3 billion in profit over the preceding four years.
About Dh2.3bn was invested in 45 new schools in Abu Dhabi between 2010 and 2015.
In Dubai, Emirates Reit has made a number of investments in the sector, buying the Gems World Academy from operator Gems International in 2013 and investing Dh208.3 million in the new Jebel Ali School that is being built at the Akoya by Damac project off Umm Suqeim Road.
“Demand for high quality education remains robust and we recognise the long term strength of the sector and its importance to the overall economy,” he said. “We continue to be interested in investing in the sector.”
