The leasing market in Abu Dhabi remained strong in the first quarter of the year with good levels of demand increasing rental rates by as much as 8 per cent, particularly in the high-end segment, a report said.

It was also a similar story for the sales market with improved values in sought-after, established communities, with some prices up on average by as much as 13.5 per cent, added the latest Q1 2013 real estate report from Asteco, a major real estate services firm.

“The rental gap is narrowing between Abu Dhabi and Dubai, which combined with improved quality, means that Abu Dhabi now has a more competitive offering. Many newcomers to the UAE are also now preferring to live in the UAE capital rather than commute from Dubai,” said Paul Maisfield, associate director and general manager, Asteco Property Management in Abu Dhabi.

Apartment rental rates have grown on average by 8 per cent since the end of 2012 in Al Raha Beach and the MBZ and Mussafah areas respectively while Khalifa ‘A’ and ‘B’ as well Muroor posted modest 3 per cent rental rate growth, according to the report.

A two-bedroom apartment in Saadiyat Beach now commands an average rental rate of between Dh135,000 ($3,674) and Dh190,000 and rates for two-bedroom properties in the Al Raha Beach  Area grew to between Dh125,000 and Dh170,000. More affordable two-bedroom apartments in MBZ and Mussafah were renting on average for between Dh45,000 and Dh55,000 per annum.

A three-bedroom villa in MBZ/Mussafah now commands between Dh80,000 and Dh105,000 on average per annum, while the similar sized-villas in Al Reef rent on average for Dh105,000 to Dh120,000 per annum, said the Asteco report.

In terms of sales prices, apartments in Al Bandar at Al Raha Beach grew on average by 13.5 per cent during the first quarter of 2013, Al Raha Beach Al Muneera gained 8 per cent on average and the Sun & Sky Towers development at Shams Abu Dhabi grew by 7 per cent. Other areas posted modest gains of around 3 per cent with the exception of Al Reef Downtown which saw little movement.

A two-bedroom apartment in Al Bandar now costs Dh13,445 per sq m (Dh1,250 per sq ft), while in Al Muneera, a similar sized-apartment is now valued at Dh 10,756 per sq m (Dh1,000 per sq ft). In Shams Abu Dhabi, a two-bedroom apartment is valued at Dh12,101 per sq m (Dh1,125 per sq ft).

Villa sales prices in Al Raha Gardens, Golf Gardens and Al Reef Villas made modest gains of between 1 and 2 per cent. A three-bedroom house in Al Reef Gardens now costs an average of Dh1.3 million, while three-bedroom villas in Golf Gardens and Al Raha Gardens are priced at Dh2.6 and Dh1.8 million respectively.

“We have witnessed an improvement in the sales market within certain established projects, particularly Al Bandar, which has seen a double-digit rise in average sales values since the beginning of the 2013,” added Maisfield.

There was little movement in office rentals in Abu Dhabi during Q1 2013 as most of the relocation demand from the government sector and from companies moving from ‘illegal’ villas was mostly satisfied in 2012. New international companies still preferred to set-up in Dubai, leaving the majority of leasing enquiries to come from internal movement of existing companies.

Grade A recent- build fitted office space remained at Dh1,600 per sq m per annum, while grade A shell and core rental rates were unchanged on average at Dh1,250 per annum. – TradeArabia News Service