Friday 29 March 2024
 
»
 
»
STABILITY IN ALL SECTORS

Residential market leading Abu Dhabi real estate recovery

Abu Dhabi, January 26, 2014

The residential sector is leading Abu Dhabi’s market recovery with prices and rental values almost picking up at all locations across the emirate, said a report.  

The prime residential sales prices increased on average by six per cent during the fourth quarter of 2013, resulting in annual growth of 25 per cent during 2013 – driven by improved investor sentiment and expectations of further price and rental growth, stated property expert Jones Lang LaSalle (JLL) in its report.

The "JLL Q4 2013 Abu Dhabi Market overview" pointed out that there was continued stability across all market sectors, supported by major government investment initiatives and positive sentiment.

Commenting on the report, David Dudley, the regional director and head of Abu Dhabi office at JLL (Mena) said: "The prime residential rental market increased on average by 8 per cent during the fourth quarter, resulting in annual growth of 17 per cent during 2013 – in part driven by new job growth, reduced commuting from Dubai and removal of the 5 per cent annual rent cap."

According to him, the residential stock increased by around 4,400 units in the fourth quarter, bringing the total stock in locations monitored by JLL to around 218,000 units. Additions to supply included units at Saadiyat Beach and Al Reef, he explained.

The sales prices for residential units, he said, witnessed a six per cent increase during the period resulting in a total annual increase of 25 per cent during 2013. This increase has however been limited to prime projects and does not represent a general increase across the whole market.

The prime residential rents witnessed an eight per cent growth to reach Dh140,000 (average rent for a prime two bedroom apartment) but once again this increase only applies to prime product, he added.

JLL said the retail, hospitality and office sectors remained stable in the the fourth quarter and were poised for recovery as supply and demand become more balanced.

"This continued stability remains selective in terms of quality of location, design  and management – leading to product differentiation and two-tier performance between high grade and low grade property," stated Dudley.

On the office sector, JLL said there were a number of major completions this quarter, including Capital Tower at Capital Centre, the World Trade Centre building on Hamdan Street and the Landmark Tower on the Corniche.

In spite of 140,000 sq m of new office supply, vacancy rate increased from 38 per cent to 39 per cent reflecting improved market absorption of new supply, he added.

On the retail sector, JLL said the stock increased by approximately 67,000 sq m of GLA this quarter with the delivery of the World Trade Centre Mall on Hamdan Street and the Eastern Mangroves Promenade retail complex.

Average line store retail rents remained unchanged this quarter at Dh2,887/sq m per annum for malls on Abu Dhabi Island and at Dh1,990 /sq m per annum for malls outside Abu Dhabi, said the property expert.

Commenting on the hotel market, JLL said while the sector continues to witness new completions, the market is approaching recovery, with occupancies increasing to 67 per cent (during the first eleven months of 2013) and RevPAR up by 7 per cent compared to YT November 2012.

According to Dudley, the occupancies are at their highest level since 2008 and while ADR’s have continued to be under pressure over the past year, 2014 is expected to register an increase in average performance as demand increases and the level of new supply moderates.

"The short to medium term market outlook remains positive, driven  primarilyby major government-backed construction and infrastructure projects such as the airport expansion, transport improvements and leisure attractions," remarked Dudley.

"However, a long term sustainable market recovery remains dependent on further government initiatives to diversify the economy and  generate new long-term sustainable employment growth," he stated.

A sustainable recovery, said the expert, is also dependent on the government continuing to implement further supply controls to ensure a balanced real estate market going forward.

On the future outlook, the Abu Dhabi market looks positive in the medium term, but there will be selective strong performers specific to sectors, locations, user requirements, property management and overall infrastructure.-TradeArabia News Service




Tags: abu dhabi | property | residential | JLL |

More Construction & Real Estate Stories

calendarCalendar of Events

Ads