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Villa sales staid and rents up 3% in prime developments, as Asteco registers significant demand for affordable residential units
Abu Dhabi's real estate sector saw a sedate start to the year with sales rates stabilising after a growth spurt in 2014, along with modest Q1 2015 rental rate increases for specific projects in key locations.
In its Abu Dhabi Property Review Q1 2015 report, the region's largest independent full service real estate company noted that demand for high-end developments in Investment Areas including Saadiyat Island and Al Raha Beach remained positive with Reem Island marked out as a strong performer in terms of sales transactions.
This was reflected in the rental market where units located in prime projects maintained an occupancy rate of 100% and overall stability in rates, with minor increases registered for certain developments with a number of popular projects registering a 3% increase in rental rates.
"Prime and high-end residential units continue to dominate demand and command higher rental rates compared with other market locations, especially for one and two-bedroom apartments. We are also witnessing a significant increase in demand for affordable units this year," said Jerry Oates, General Manager, Asteco Abu Dhabi.
"However, we continue to see limited movement in overall villa sales transactions partly due to a shortage of available quality stock and the continued divide in price expectations between purchaser and vendor. However, with a number of new project announcements expected this year, both from large master-developers and sub-developers, this could prompt renewed market movement," he added.
Aldar reports that its 283 villa land plots, which were targeted at UAE nationals, as part of its Al Merief project in Khalifa City, are sold out, and the upscale Hidd Al Saadiyat development, from the Saadiyat Development and Investment Company (SDIC), reached a major construction milestone at the beginning of the year.
The development registered robust demand for its phase 1 release of 488 villas, which are scheduled from end of 2016 onwards.
The largest increases in apartment sales prices in Q1 were found in Al Bandar, which saw 3% increase whereas Al Muneera, Al Zeina, Saadiyat Beach Residences all saw 2% increases. Marina Square, Reef Downtown, Sun & Sky Towers and The Gate remained the same. Villa sales prices in Raha Garden, Golf Gardens, Al Reef Villas, Saadiyat Beach Villas and Hydra Village saw no increase on Q4 2014 levels.
Comparing prime investment areas with lower-end Abu Dhabi island apartments, one and two-bedroom units in Shams Abu Dhabi are renting for up to AED 120,000 and AED 180,000 respectively versus AED 70,000 and AED 90,000 for apartments in Central Abu Dhabi. Off-island the price drops even further with one and two-bedroom homes in Khalifa and MBZ City going for AED 55,000 and AED 80,000 per annum respectively.
A four-bedroom villa in Al Reef is currently renting for AED 155,000 per annum with a three-bedroom in Hydra Village leasing for around AED 95,000. By comparison a luxury three-bedroom property on Saadiyat Island would rent for up to AED 300,000 per annum.
Abu Dhabi's office market registered positive rental rate growth of 6-8% for Grade A space in the first quarter of 2015 due to limited supply, especially of fitted and efficient space in new buildings.
"This in turn led to an increase in enquiries for better quality Grade B office space, although rental rates have not responded with increases due to the high volume of vacant office space currently available," remarked Oates.
Availability of office space for sale in Infinity Tower and Sky Tower on Reem Island will be further boosted this year with the addition of ADDAX Tower at City of Lights.
For more details, please visit www.asteco.com
A copy of the full Asteco UAE Property Review Q1 2015 report can be downloaded from - www.asteco.com/valuation-advisory/overview/
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About Asteco
Asteco, a major regional and international real estate services firm and the largest property services company in the United Arab Emirates, was founded in Dubai in 1985. Asteco offers independent market analysis, design development consultancy and valuation services, sales and leasing services, as well as asset and property management services.
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© Press Release 2015
