Sharjah residential rent rates up 4.6pc
Dubai, November 19, 2013
Sharjah’s residential rental values grew by 4.6 per cent during the third quarter, said a research report.
Tenant demand in Sharjah is experiencing a boost as many displaced families from other parts of the Middle East hone in on its cultural attractiveness, family lifestyle and affordable rents, according to the latest research by international real estate consultancy Cluttons.
Improved amenities that cater to a relaxed family lifestyle along the Buhairah Corniche have helped to bolster rental value growth in places such as Al Majaz, which was Sharjah’s second best performing market for apartments in Q3, it said.
After experiencing no change in Q2, rents in Al Nahda rose by 5.8 per cent in Q3, making it the strongest performing apartment submarket. This is in part also due to demand rippling across the border from Dubai, which the report cites as also contributing to the upturn in demand to live in Sharjah.
Steve Morgan, head of Cluttons Middle East, said: “This combination of culture and lifestyle blended with affordability means that rental values are now 15 per cent up on this time last year in the emirate. Supply of residential stock is limited, resulting in near 100 per cent occupancy levels in the city centre.
“Although some schemes that were put on hold in the downturn are now being resurrected, delivery times will have little impact in the short term and landlords are compounding the issue by holding back on releasing units to the market until a perceived peak is reached.”
The report also highlighted a growing investment market with an upturn in registered transactions, which appears to be driven by Kuwaiti investors, in addition to those from areas impacted by the Arab Spring, seeking out lucrative opportunities.
Occupier demand for office space in Sharjah continues to be underpinned by small and medium enterprises (SME), which form the backbone of the emirate’s financial and business services sector, said the report.
Office rents still lag behind those in Dubai and Abu Dhabi, but this adds to its attractiveness as a launch platform for SMEs. There are an estimated 45,000 based in Sharjah alone with many operating within the real estate, manufacturing and financial and business services sectors, it said.
The distortion in supply, expected as a result of the emirate’s flagship urban regeneration scheme, The Heart of Sharjah, is however yet to materialise, offering some respite to occupiers who were previously rushing to find alternative space, it added.
According to the report, the majority of relocation activity is being driven by more competitive rents now available, with a focus on Grade A space in particular, although landlords have been slow to adjust expectations. - TradeArabia News Service