UAE residential market set for growth
Dubai, January 4, 2012
The UAE’s residential market will continue to mature in 2012 with quality and amenities driving demand, said real estate specialist Cluttons in its outlook for the year.
Offering a snapshot for predicted property trends across the residential and commercial sectors in the UAE this year, Cluttons said rents are expected to bottom out in the commercial sector, with minimal further reductions.
'There will be a continuation of many of the trends seen in the residential market, with good quality, well-established developments benefitting from nearby services and amenities, and continuing to do well at the expense of newer residential areas,' the expert said in a report.
Cluttons, which has been enjoying a dedicated Middle Eastern presence since 1976, said it anticipated that the residential market will continue to gain from increasingly available mortgage finance options at competitive rates.
With regard to the commercial sector, Cluttons, which had identified general maturing of the marketplace in 2011, is predicting a brisk start to 2012.
'Cluttons anticipates an improvement in occupier demand as we move into 2012 with increasing numbers of companies looking to relocate into the UAE. This trend can be attributed to the effects of the Arab Spring, and Dubai’s stability and perception as a business ‘safe haven’.'
On the office sector, Cluttons said the general oversupply in the market place and low rents on offer will also continue to fuel occupier movement within the city.
Many companies are still going through fairly rigid cost saving and downsizing exercises, noting that more focus has been put on reducing rents and vacant floor space that is no longer needed, the expert pointed out.
'Whilst a general oversupply of office stock will continue to be a feature of the market in 2012, there are signs that rents are beginning to bottom out and further reductions are hoped to be minimal.'
Cluttons pointed out that the rental incentives and flexibility offered by landlords is likely to continue to increase in order to reduce vacancy levels.
However, despite a number of positive signs, Cluttons stated that the overall situation in Europe and US could not be ignored, and hence it has cautioned markets over the potential knock-on effects in the region in respect of debt financing and general liquidity levels.-TradeArabia News Service