Rents rise in Dubai, slump in Manama
Knight Frank Index shows upheaval in Bahrain caused 18% drop in rents
Prime rents in Dubai rose by more than three percent in the first half of 2012, according to the latest edition of the Knight Frank Prime Global Rental Index.
It showed rental values in the emirate increase by 3.3 percent between January and June and by the same amount over the past year.
The index also showed that rents had risen by two percent in the second quarter of 2012, placing Dubai ninth in the index of 16 countries covered.
The emirate outperformed the likes of Singapore, Geneva, London and Hong Kong, Knight Frank said.
The index was propped up by Bahrain's capital city Manama where protests continue to hit economic performance.
According to Knight Frank, rents in Manama have slumped by more than 18 percent in the past year although the rate of decline slowed significantly in the second quarter (-0.2 percent).
Globally, prime rents rose by 2.3 percent in the year to June and by one percent over the three month period to June.
The index was topped by Nairobi, Kenya where rents rocketed by over 17 percent in the year and by five percent in Q2 2012.
Tel Aviv, Guangshou, New York's Manhattan and Shanghai also performed strongly to be included in the top five.
Although the index recorded annual growth of 2.3 percent in the year to June, this modest performance remains some way off the double-digit growth seen pre-2008, suggesting that the prevailing economic conditions continue to impede growth.
Jemma Scott, Knight Frank’s head of corporate services, said Manhattan prime rents are at their highest since the recession.
She added that future rental growth is likely to be focused on the world’s developing markets as business globalisation increases.
"Nairobi, Tel Aviv and Guangzhou’s positions at the top of the rankings this quarter are not incidental. In sharp contrast to many western economies, Kenya, Israel and China are forecast to see chunky GDP growth, due in large part to a surge in foreign investment," she said.