Abu Dhabi property prices rise 6% in Q3, says JLL
Retail, office, hospitality sectors showing signs of stabilisation
All sectors of the Abu Dhabi real estate market are positioned in the recovery stage of their cycle for the first time since 2008, Jones Lang LaSalle (JLL) has said in a new report.
Its Q3 2014 Abu Dhabi Real Estate Market Overview report said residential, retail, office and hospitality sectors now all showed signs of stabilisation.
David Dudley, head of JLL's Abu Dhabi office, said: "The third quarter of 2014 recorded the continued growth of prices in the residential market and growth in office rents, with continued stabilisation in the hospitality, retail and office sectors.
"All sectors of the Abu Dhabi market are now positioned in the recovery stage of their cycle, for the first time since 2008."
He added: "Residential remains the strongest performing sector driven by positive investor sentiment and population growth and potential future under-supply."
Around 1,200 units were added to the residential stock during Q3 while sales prices increased by 6% during Q3 to reach approximately AED16,000 per square metre. Rents for prime residential units remained stable at AED150,000 per annum.
JLL said it expects a future housing shortage as near term supply deliveries are below historic averages at a time of strong demand and predicts further rental increases over the short term.
The report showed that the office market witnessed growth for the first time in Q3 after being stable for the past two years.
Vacancy rates are reducing due to increased market absorption and a reduction in speculative supply in the pipeline, JLL added.
The report also said that retail rents for malls on Abu Dhabi Island have remained stable this quarter, with some malls outside the Abu Dhabi Island seeing a marginal increase in rents as they have witnessed higher footfalls.
JLL added that the Abu Dhabi hotel sector continues to recover in Q3, with the year to August seeing higher occupancies (71%) compared to 2013 (64%).