While headline rents in Abu Dhabi Market prime retail and office projects remained relatively stable, both sectors moved further in favour of occupiers. Q3 2017 also saw a further decline in residential and hospitality real estate performance due to the continued reduction in market sentiment.
Office rents have remained stable in Q3 2017 despite the decline in demand, as office supply remains stable with no major completions. Expect a downward pressure on rents over the next 12 months, particularly in secondary buildings in the delivery of additional supply at a time of weaker demand in Abu Dhabi real estate market.
Retail rents in Abu Dhabi have also remained stable in the better performing malls, despite a continued decline in retail spending during Q3. Mall operators will offer more extensive real estate leasing incentives to maintain and attract retailers to support the market in the absence of further new supply but the stable rents disguise a softening in market conditions.
The hospitality market registered an 8% drop in ADRs and a 2% drop in occupancy levels compared to the same period last year. Consequently, RevPar declined by 11% in YT August 2017 compared to the same period last year. The final quarter of the year is traditionally a strong period for the Abu Dhabi hotel market and this trend will be enhanced by the opening of the Louvre museum in November in addition to the Formula 1 Grand Prix.
For the full report, which includes detailed information on residential, office, hotel, and retail property, click here
Check also other 2017 Real Estate Market Overviews from the region:
Craig has over 20 years’ experience providing clients with quality advice on real estate market conditions in the UK, Asia Pacific and the Middle East. With a background in urban economics and spatial planning, he has particular expertise in the areas of property market research, development consultancy, transport related infrastructure projects and corporate real estate.
Since moving to the UAE in 2006, Craig has authored over 50 research reports on different aspects of the MENA real estate market. He has also provided market research and consulting services to major investor, developer and government clients and has appeared as an independent real estate expert before the Dubai International Arbitration Centre (DIAC).
Craig holds a Bachelor of Arts in Economics & Geography from Lancaster University and an M.Phil in Environmental Planning from Reading University (UK).