Rents for high quality office property in Abu Dhabi is predicted to stabilise during the rest of this year, while further declines are expected in non-prime developments, a property consultancy said.
Rents to stabilise in top-end office space after fall
Rents for high-quality office property in Abu Dhabi are predicted to stabilise this year, while further declines are expected in non-prime developments, a property consultancy said yesterday.
"Within the commercial market, rents continue to soften, particularly in secondary stock or non-prime developments," said Paula Walshe, the associate director for commercial leasing at Cluttons Middle East.
But prime commercial space in Abu Dhabi should hold its value during the remainder of this year, despite declines in rents over the past year, Ms Walshe said.
Rents for non-prime commercial property have fallen as much as 15 per cent since the beginning of year in the emirate, according to the consultancy. The comments came in a statement ahead of the release of the consultancy's first-quarter property report for the capital next week at Cityscape Abu Dhabi.
Values and rents for Abu Dhabi's residential property are expected to continue to soften, amid an increase in supply, Cluttons said.
"Within the residential sector, rents continue to fall across many sub-markets, especially in the new residential districts where the handover of new apartments has happened this year, including Al Reem and Al Raha Beach," Ms Walshe said.
Average residential rents on the Abu Dhabi mainland fell 30 per cent in the fourth quarter from the same period a year earlier and 5 per cent from the previous quarter, according to the property consultancy CBRE.
Developers are increasingly offering incentives to customers as the property market becomes more competitive. The Tourism Development and Investment Company this week launched a lease-to-own payment programme for apartments on Saadiyat Island that are part of its St Regis resort.
"The residential market has become very fractional in its nature, so it is individual properties rather than just areas that are performing well," said Chris Speller, the group director for Cityscape Abu Dhabi. "Typically, units in established locations are able to provide best return with very strong demand levels present, reducing risk to rental voids."