While rental rates for the commercial real estate sector in Abu Dhabi have fallen for the past 12 months, higher quality developments are likely to buck the downward trend for the remainder of 2012, according to a report by property consultants Cluttons released to coincide with the sixth edition of Cityscape Abu Dhabi. The four-day event takes place next week from 22-25 April at the Abu Dhabi National Exhibition Centre, and is the annual barometer for the real estate market, where thousands of investors and end-users gather to learn about the latest market trends and construction updates of many of Abu Dhabi’s master developments.
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 LLC Middle East, which will release their Abu Dhabi First Quarter Property Market Update next week during Cityscape Abu Dhabi.
Held under the Patronage of His Highness Sheikh Mohammed Bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, Cityscape Abu Dhabi has firmly established itself as the region’s leading real estate development and investment event, which last year attracted more than 25,000 visitors from 78 countries looking to learn of the latest developments and real estate market trends.
Key developers taking part this year include Aldar, Tamouh Investments, Sorouh, Reem Investments, the Tourism Development & Investment Company (TDIC), and Mubadala, which will provide the latest updates of its Sowwah Square development in the heart of Abu Dhabi’s new Central Business District.
Another much anticipated highlight this year includes an update of the Abu Dhabi Vision 2030 by the Abu Dhabi Urban Planning Council.
Cluttons’ latest report will highlight Abu Dhabi’s residential, commercial and industrial market changes over the past six months and predictions for the future. Cluttons will also release the ‘Doing Well by Doing Good’ report on green initiatives at Cityscape Abu Dhabi, focusing on the impact of sustainable development on the value of the Abu Dhabi real estate market.
Walshe said that 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 the handover of new apartments has happened this year, including Al Reem and Al Raha Beach,” added Walshe.
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.”
Cityscape Abu Dhabi returns with regular features, the Cityscape Awards for Real Estate – MENA on 23 April, celebrating the latest cutting-edge projects shaping modern city skylines across the Middle East and Africa; and the Investor Round Tables, taking place from 22-24 April, where C-level investors and developers discuss partnership opportunities and strategy.
Also returning is the Middle East Real Estate Summit, where a panel of more than 35 industry leading speakers currently active in the Middle East will share their collective experience and tackle the major challenges facing the regional real estate sector.
The Foundation Partner of Cityscape Abu Dhabi 2012 is the Department of Municipal Affairs, with Ubiquitous Telecom Technology supporting the event as the Silver Conference Partner.