May 16 2013
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Rents across Abu Dhabi will rise from second half of 2013
Secondary and tertiary locations of Abu Dhabi are currently experiencing a modest rent deflation, but that's set to change. Lease rates across the capital are expected to increase from the second half of the year, says CBRE.
"Whilst at this time growth remains restricted to a select few developments, we are likely to see more widespread growth return during the second half of the year," Matthew Green, Head of Research UAE, CBRE Middle East, told Emirates 24/7.
Over the past six months, prime properties within the Raha Beach and Saadiyat Island masterplans and choice properties along the Corniche, have witnessed rental growth, rising nearly five to 10 per cent in some cases for new leases.
Likewise, Jones Lang LaSalle (JLL), a global property consultancy, said in April prime buildings were showing signs of stabilisation and selective recovery, while secondary market continued to experience downward pressure on rents.
In the last two day, we reported that Abu Dhabi government owned companies were sending reminders to their staff, asking them to relocate to the capital before September, or lose out on their housing allowance. CBRE, however, stated rents in Dubai won't be affected because of this movement.
Asked if relocation will lead to rental increase in the capital, Green said: "Average rents in the capital continue to experience modest deflation despite increasing occupier demand. This is a consequence of the significant product delivery over the past two years, with a further pipeline of 17,000 units to be completed in 2013."
He added: "As demand grows during the course of this year, we can expect to see average rents start to slowly rise again."
JLL said earlier that it expects 16,000 residential units to enter the capital's realty sector this year. Nearly 2,000 units were released in the first quarter, which took the total residential stock at 208,000 units at the end of Q1 2013.
The majority of new units were delivered in the Al Bateen Park Development, Al Reef Community, Saadiyat Beach Residences and Nation Towers on the Corniche. The remaining 14,000 units are scheduled to be delivered are located in Eastern Mangroves Promenade by TDIC, Saadiyat Island, Al Bustan Complex on 29thStreet and several towers on Reem Island.
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