Guest Posts, Link Building, SEO, Pay-Per-Click campaigns
Advanced Search
Home / Features / Abu Dhabi real estate market witnesses growth in prime residential sector in Q1 2014
Special Features

Abu Dhabi real estate market witnesses growth in prime residential sector in Q1 2014

The Abu Dhabi real estate market witnessed growth in the prime residential sector in the first quarter of 2014, says JLL, a leading real estate investment and advisory firm, it its first quarter (Q1 2014) Abu Dhabi Real Estate Overview released today at Cityscape Abu Dhabi. The Abu Dhabi real estate market turned continued to show signs of growth and recovery during Q1 2014. This optimism remains focussed on the prime residential sector which witnessed increased rents and prices and near to full occupancy for high quality product. The retail segment continues to experience growth, while the hotel and office sectors remain stabilised. According to the Abu Dhabi Market Overview, Q1 2014, the first quarter of 2014 continued to witness growth in the prime residential market and further stabilisation of the office and hospitality sectors. Retail rents for malls on Abu Dhabi Island witnessed a slight increase during Q1. Short-term demand will be fuelled by investment and job growth from new major construction and economic development projects, combined with a general improvement in market sentiment. Long-term market recovery will be dependent on the pace of the government’s ongoing initiatives to diversify the economy and generate sustainable new employment growth as many of these initiatives remain a work-in-progress. Residential stock increased by around 1,700 units in Q1, bringing the total stock to around 238,000 units. Additions to supply included units within Reem Island, Saadiyat Island and Al Reef. The residential sales market continues to rise due to positive investor sentiment and increased demand from end users. This led to price growth for the fifth successive quarter - following 25% annual price growth for prime, high quality units during 2013, prime residential prices grew by a further 9% during Q1 2014 - although it is important to note that the volume of transactions remains limited. Demand for the residential rental market also continues to rise driven by new job creation and government policies leading to 17% rental growth for prime, high quality units during 2013 and 4% growth during Q1 2014. The removal of the rent cap is expected to lead to rents increasing further this year. The overall office market remains over-supplied, with new additions to supply continuing to rise. Large-scale demand continues to be dominated by government entities and state-owned enterprises, although there are indications that private sector occupier demand is starting to increase. While prime rentals continue to be stable, the future growth of the office market depends on government economic development initiatives to grow new demand and increase private sector activity. Office supply currently stands at 3.1 million sq m, with an additional 78,000 sq m of office GLA expected to enter the market during 2014. The future additions to supply will continue to place downward pressure on rents for secondary space. There were a number of major completions in the office market this quarter, including the NBAD building at Capital Centre and the Siemens building at Masdar City. Grade A and Grade B office rents have remained unchanged in Q1 2014 averaging AED 1,540 / sq m and AED 1,180 / sq m. For retail, there currently remains a limited supply of high quality malls relative to the spending power of the population. Retail stock remained stable at 2.2 million sq m GLA this quarter with no major deliveries. Average line store retail rents for malls on Abu Dhabi Island increased this quarter to reach AED 3,000 / sq m per annum. Average line store rents in malls outside Abu Dhabi have however decreased to reach AED 1,820 / sq m per annum from AED 1,990 / sq m per annum in Q4 2013. The future outlook for retail is positive as consumer demand continues to increase from population, employment and tourism growth. However there is substantial supply in the pipeline including several super regional malls which will cause the market to become more competitive. In spite of rising supply, there is a major shortage of neighbourhood and convenience retail. The hotels sector continues to witness new completions with the opening of Novotel Al Bustan and Royal Rose Hotel in Q1 2014. Occupancies increased to 76% (YT February). While ADRs remain under pressure (decreasing by 14% in YT February 2014 compared to the same period in 2013), the hotel market has started to recover and is set to experience improved performance over the rest of 2014. David Dudley, Head of Abu Dhabi office at JLL MENA said, "It is encouraging to see further signs of growth and recovery. The general theme is selective recovery - with different sectors at a different stage of recovery, and the residential sector leading the way. A two tier market exists with a significant divergence between high and low quality product (in terms of quality of location, design, functionality, asset management etc). Sustained market recovery is very much dependent on continued government investment in to infrastructure and economic development to boost demand."



We accept Guest Posts



  All fields are mandatory
Your Name
Email
City
Country
Your Comments
 Max 250 characters - Word Count :
Image Verification
Change Image

     


View Special Features by Category
Airlines & Airports
Art & Gallery
Banks & Financial sector
Business
Car Industry
Construction
Dubai Government
Dubai Metro
E-Guides
Eco-Friendly
Education & Institutions
Electronics
Entertainment
Events & Occassions
Exhibition Center
Family Shows
Food & Beverages
Free Zones
Golf Clubs
Government Departments
Health & Fitness
History & Culture
Home/Furnishing/Interiors
Hospitals & Clinics
Hotels & Hospitality
Identity cards
Internet Services
Media & News
Mortgage
Music
Online Food Service
Online Store
Organisations
Other
Other Emirates
Parks & Beaches
Precious Metals
Real Estate & Property
Religion & Culture
Resorts & Clubs
Restaurants
Shopping Malls
Spas
Special Centres, Groups & Communities
Sports & Events
Sports Bars
Technology
Trade Fair
Travel & Leisure
UAE Market News
VIP Services
Wedding Planners

Back to top








News Alerts
News Alerts
Stay ahead with abu dhabi news
dcg mobile
adcg Mobile
With you wherever you go
rss feed
RSS Feeds
Get the latest
dubai blog
Abu Dhabi Blog
Your space, your voice
sitemap
Sitemap
ADCG at a glance