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Friday, July 12, 2024

Abu Dhabi apartment rents to fall slightly by Q1 2023


Average apartment rents in Abu Dhabi fell by 0.7% in the year to March 2023, while villa prices increased by 1.1%.

The first quarter 2023 UAE real estate market review released by CB Richard Ellis showed that sales prices for both apartments and villas rose during the year, with apartments up 1.4% and villas up 1.6%.

The number of off-the-plan sales in the emirate rose by 131.5%, while secondary market sales fell by 0.2% for the year.

In Dubai, the average apartment price rose by 12.4% in the first quarter of this year, and the price of villas rose by 14.8%. focus Amidst the real estate headlines in recent months, Taimur Khan, head of research at CBRE Middle East and North Africa, said that the overall UAE real estate sector maintained strong demand levels in the first quarter of 2023.

“While we do expect slower growth rates going forward, we expect the market to continue on its performance trajectory this year,” Khan said.

“Where we are likely to see a slowdown, it will be driven by supply shortages, mainly in industrial, office and major retail sectors.”

In Abu Dhabi, only 272 residential units were delivered during the year, limited to two districts, Al Raha Beach and Shams Abu Dhabi, according to the CBRE report. However, over the remainder of 2023, 7,306 units are expected to be completed, 52.2% of which are located on Yas Island, Al Sowwah and Al Maryah Islands, CBRE said.

In the capital office sector, the market average occupancy rate of institutional-grade buildings tracked by CB Richard Ellis has reached 92.8% in the first quarter of 2023, up from 81.5% in the same period last year.

At the same time, asking rental prices for prime, grade A and grade B rose by 19.1 per cent, 8.8 per cent and 10.7 per cent, respectively, the report showed.

The scarcity of new development in the capital will also be a “significant concern” going forward, especially as more and more new supply is pre-leased, the report added.

“Since government-related entities are also the main occupiers of space, this sometimes crowds out the private sector.”

In Dubai, office occupancy rates also rose, while average asking rents for Prime, A, B and C grades increased by 20.2%, 13.5%, 18.7% and 28.7% respectively.

According to CBRE, by the first quarter of 2023, average rents in several market segments have surpassed the levels of early 2019.

(Writing by Imogen Lillywhite; Editing by Brinda Darasha)



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