Rental rates for the commercial real estate sector in Abu Dhabi have fallen for the past 12 months, but higher quality developments are likely to buck the downward trend for the remainder of the year, according to Cluttons.
Rents for non-prime commercial real estate have fallen by as much as 15 per cent since the beginning of year in the UAE capital, however, the rate of fall is not consistent across all sub-markets, with higher quality developments proving to be more resilient and still attracting good levels of interest.
“Within the commercial market, rents continue to soften particularly in secondary stock or non-prime developments,” said Paula Walshe, Associate Director Commercial Leasing at Cluttons Middle East, which will release their Abu Dhabi First Quarter Property Market Update next week during Cityscape Abu Dhabi.
Walshe said while prime commercial space in Abu Dhabi should hold its value this year, capital values and rents for the emirate’s residential sector will continue to soften, due mainly to recent and impending handovers of new properties.
“Within the residential sector, rents continue to fall across many submarkets especially in the new residential districts where thehandover of new apartments has happened this year, including Al Reem and Al Raha Beach.”
Chris Speller, Group Director for Cityscape Abu Dhabi added: “The residential market has become very fractional in its nature, so it is individual properties rather than just areas that are performing well. Typically units in established locations are able to provide best return with very strong demand levels present, reducing risk to rental voids.”