The property market in the UAE is set to remain a "tale of two very different cities", a report from property advisory firm Jones Lang LaSalle noted.
UAE property market to remain a tale of two different cities
The property market in the UAE is set to remain a "tale of two very different cities" next year according to a report from the property advisory firm Jones Lang LaSalle.
In its review of the year for the Emirates, the company said there were "grounds for cautious optimism about the prospects for the Dubai real-estate market in 2013" while "demand remains suppressed in the short term" in Abu Dhabi. Jones Lang LaSalle reports that while property has lagged the overall economy in Dubai this year, it predicts rents and prices will rise in most of the city's sectors.
In Abu Dhabi, Jones Lang LaSalle said demand was likely to remain suppressed next year, however.
Hotels were the strongest performing sector in Dubai this year, the company said.
Housing was the most varied sector with rents and prices increasing markedly in the most popular established locations such as Dubai Marina and Palm Jumeirah over the past six months, but other areas have had no increases.
Retail prices and rents too were subject to similar variations with established malls such as Dubai Mall and the Mall of the Emirates benefiting from the growth in tourist numbers and likely to remain the strongest performers over the coming year.
The beleaguered office sector could also have a limited recovery next year, Jones Lang LaSalle said, although the sector remained burdened with a significant level of vacant space and with more projects scheduled to complete in 2013.
Rents in prime single ownership office buildings in preferred locations such as Sheikh Zayed Road, Downtown and free-zone buildings in Tecom were now stable and could improve slightly in the coming year.
The industrial market, which remained less cyclical than other sectors, was set to be the focus of continued demand, Jones Lang LaSalle said. It predicted that as the volume of freight through Jebel Ali port and the new airport at Dubai World City increased over coming months, demand for warehousing and logistics space in the major industrial locations to the south of Dubai would also rise.
"While 2013 is likely to see a broader based recovery in Dubai, the strongest performance will remain concentrated on those projects for which there is confirmed investment and tenant demand," said Alan Robertson, the chief executive of Jones Lang LaSalle Mena.