23/07/2014 01:55 AST
Sales prices in Abu Dhabi’s residential property sector have increased by average of 17 per cent in the first half of 2014, according to JLL.
It was also the sixth successive quarter of increases in sales prices for residential units, with a 7 per cent rise over the April–June period, JLL said in its latest Abu Dhabi Real Estate Market Overview.
Total residential stock in Abu Dhabi is now around 240,000 units after 1,750 units were completed in Reem Island, Danet Abu Dhabi and Al Reef during the second quarter.
“The Abu Dhabi market continues to be dominated by government-related investment with short-term demand being fuelled by investment and job growth from new major government-backed construction projects, such as the airport expansion, Etihad Rail, Saadiyat Island museums and other major infrastructure, economic and social development initiatives,” said Craig Plumb, head of research at JLL MENA.
Rents in the UAE’s largest emirate have increased following the recent removal of the rental cap. JLL said that the increase has brought rent prices in line with current market levels. The average rent for a two-bedroom increased by 3 per cent in the second quarter to Dh150,000, according to JLL.
“While new supply is needed — particularly of quality residential product, supply controls are required to ensure the right product is prioritised in locations with existing infrastructure,” Plumb said.
The vacancy rate in Abu Dhabi office space is expected to increase past its current rate of 30 per cent due to additional space scheduled to come online over the next two years. However, office rental spaces remained unchanged in the second quarter with prime space averaging Dh1,540 a square metre and secondary space averaging Dh1,180 a square metre.
JLL said stock remains stable at 3.1 million square metres and that that were no major new deliveries between April and June. Downward pressure on office rents is expected in 2014 with 130,000 square metres expected to enter the market this year, JLL said.
Average line store retails rents for malls on Abu Dhabi Island remained stable at Dh3,000 a square metre as well as outside Abu Dhabi at Dh1,820 a square metre. An additional 20,00 square metres of gross leasable area came online in the second quarter. The emirate’s total retail stock is now 2.2 million square metres. Over 400,000 square metres is expected to enter the market by the end of the year, largely due to the delivery of Yas Mall on Yas Island.
Hotel occupancies year to May were 77 per cent in Abu Dhabi. However, the average daily rate has dropped by 8 per cent compared to the same period last year. JLL said the hotel market is expected to improve over the second half of the year.
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