Dubai - UAE, 4th February 2016: The fourth quarter 2015 real estate report issued by leading local consulting firm ValuStrat - has shown that the residential market registered no effective quarterly decline for the first time since the current period of correction following the March 2014 peak. Statistical analysis suggests that 2016 may witness a plateau in prices, indicating a buyer's market in anticipation of higher rental yields for mid-affordable properties, and increased interest in prime properties in a search for capital appreciation.

A comparison of values for a fixed basket of properties in 26 freehold locations measured over time, has given the ValuStrat Price Index (VPI) the ability to compare like with like, factoring in property specifications, such as quality, views, amenities and age. The Q4 VPI has shown a 6.4% decline of values YoY. However the quarterly rate of decline has shown no significant change in values. October and November's residential VPI both registered 98.0 points, while December saw a marginal decline of 0.1% to 97.9 points.

More cash investors are seeking projects by well reputed developers particularly for ready properties. Dubai apartment and villa markets saw values marginally decline by 0.1% and 0.4% QoQ respectively. The median apartment value in December was AED 14,122 per sq m (AED 1,312 per sq ft) and for villas was AED 14,660per sq m (AED 1,362 per sq ft).

Medianresidential asking rents dipped by 3%-5% in comparison to the same period last year. Compared on a quarterly basis, residential asking rents declined slightly by 2.3%. However,overall residential rents were 10.4% lower than the same period in 2013.

ValuStrat estimates the total completed residential supply during 2015 at14,000 apartments and 3,400 villas.Seven off-plan residential projects were launched in Q4 to add more than 1,500 units to the residential pipeline by 2018.

"...Around half of the residential projects originally scheduled for completion in 2015 are delayed and have been rescheduled for handover during 2016 and 2017, reflecting a continued construction sector slowdown..."added Haider Tuaima, ValuStrat Research Manager.

Office transaction prices fell by 13% since last year and 4.6% since the third quarter. However, asking sales prices during Q4were 15.4% higher than two years ago. Median asking rents for office space remained relatively stable during Q4, with only a marginal change recorded the last 12 months. The median asking rent for office space was AED 1,173 per sq m (AED 109 per sq ft).

This quarter saw an additional 167,000 sq m (1.8 Million sq ft) of retail mall Gross Leasable Area (GLA). 130,000 sq m (1.4 million sq ft) of GLA has been added with the opening of Nakheel's Dragon Mart 2 located in International City, Nakheel also inaugurated the 37,000 sq m (400,000 sq ft) Golden Mile Galleria on Palm Jumeirah.

The estimated total number of hotel rooms and hotel apartments in 2015 stood at more than 100,000. Six hotels with 2,138 hospitality units were added in Q4, five of which are 5-star and one 4-star. Eleven new hotels were announced adding 4,251 keys to the pipeline over the next three years.

The average occupancy rate in Q4 was 80%.October and November saw occupancy rates of 80% and 83% respectively. With increasing new hotel room supply, year-on-year Average Daily Rate (ADR) for October dropped by 14.7%, November declined by 9.1%. Continued downward pressure on room rates is expected in the medium term due to supply exceeding demand, currency fluctuations, oil prices and geo-political situations affecting general sentiment.

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About ValuStrat:
ValuStrat is a leading consulting firm headquartered in Dubai providing Advisory, Valuations, Research, Due Diligence and Divestment services across a diverse range of industry sectors since 1977. Offices in UAE, Saudi Arabia and Qatar serve over 750 corporate clients in the Middle East. Client base includes financial institutions, local corporates, multinationals, governments, SMEs, family businesses and start-ups. Some of the key sectors serviced by ValuStrat's consulting team include real estate, hospitality, healthcare, education, manufacturing, retail, entertainment, transport and FMCG.

About the ValuStrat Price Index:
The ValuStrat Price Index (VPI) for Dubai's residential sector is constructed to represent the monthly price change experienced by typical freehold residential units within Dubai. The VPI provides an up-to-date opinion of current pricing. The VPI is a comprehensive weighted sample of all property types across the city. The latest in-depth 100+ page report that includes citywide analysis of 26 freehold districts, including the ValuStrat Price Index, transaction volumes, service charges, Price to Rent Ratios and Net Yields in now available to subscribers.

For more information please visit: www.valustrat.com

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© Press Release 2016