The residential rents in Dubai fell by two per cent during the third quarter of 2015, as a fresh supply of around 2,000 new units entered the market, said a report.

The capital values for completed apartment units fell nine per cent year-on-year, with the highest drop registered across prime developments, which had seen a substantial rise in rate of sales since the second half of 2013, stated  MPM Properties, a subsidiary of Abu Dhabi Islamic Bank (ADIB), in its report.
 
The total value of residential apartment transactions fell by 8.6 per cent quarter-on-quarter, from Dh4.62 billion ($1.25 billion) in previous quarter to Dh4.22 billion ($1.14 billion) in the third quarter, according to the latest Dubai Real Estate Market Overview report.

This is in line with past trends, with the third quarter of the year tending to be a relatively quiet period for the real estate market because of the peak summer and holiday season.

On the supply front, around 2,000 new units were completed in the quarter, mostly in leasehold areas, it added.

On the office sector, the report said a controlled supply of new units, coupled with continued positive occupier sentiment, was helping to maintain Dubai’s healthy rental and occupancy levels.

The Dubai office market remained stable quarter-on-quarter despite a rise in new stock, as demand for office space continued to show an upward trend, mainly from start-up companies.

Prime Central Business District (CBD) rents ranged between Dh110-220 ($30 to $60) per sq ft per annum while secondary locations have recorded rents ranges between Dh70 to 200 ($19 to $54) per sq ft per annum, it added.

The ADIB unit said Dubai’s retail sector witnessed a marginal drop in footfall and spending during the third quarter, with a number of major retailers reporting slower sales year-on-year.

This could be largely attributed to a fall in spending by tourists, who are key drivers of demand, it stated.

Commenting on the report, Paul Maisfield, the chief executive of MPM Properties, said: "Much of the impact has been noticed across the luxury retail segment due to global currency fluctuations and falling oil prices. However, overall prime retail assets remain strong performers and demonstrate positive growth with waiting lists for space still over-subscribed despite expansions."

The hospitality sector saw an addition of around 807 new hotel rooms and apartments enter Dubai’s market, taking the total count to around 96,000 rooms and apartments.

Historically, the third quarter has recorded the lowest tourism demand due to peak summer temperatures, said the  MPM Properties in its report.

Rising stock of hotel rooms has further impacted the overall revenue performance of hotel properties despite summer promotions offering reduced room rates and packages to incentivize more visitors to stay in Dubai hotels it added.-TradeArabia News Service