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Abu Dhabi’s average apartment rents dropped by 0.7% in the year to March 2023 while villa prices grew by 1.1%.
CBRE’s UAE Real Estate Market Review for Q1 2023 showed that sales prices for both apartments and villas increased during the year, by 1.4% for apartments and 1.6% for villas.
The number of off plan sales in the emirate increased by 131.5%, while secondary market sales for the year fell by 0.2%.
While Dubai, with average apartment prices up by 12.4% for the year to the first quarter and villa prices up by 14.8%, has been the focus of real estate headlines in recent months, Taimur Khan, head of research, MENA, at CBRE, said the UAE real estate sector as a whole had maintained strong levels of demand during the first quarter of 2023.
“Whilst we do expect a moderation in growth rates going forward, we anticipate that the market will continue its performance trajectory over the course of the year,” Khan said.
“Where we are likely to see a slowdown, it will be driven by a shortage of supply, primarily in the industrial, office and prime retail sectors.”
In Abu Dhabi, only 272 residential units were delivered during the year, according to the CBRE report, confined to two areas, Al Raha Beach and Shams Abu Dhabi. However, over the remainder of 2023, 7,306 units are anticipated to be completed, 52.2% of them in Yas Island, Al Sowwah, and Al Maryah Island, CBRE said.
In the capital’s office sector, the market-wide average occupancy rate in institutional-grade buildings tracked by CBRE has reached 92.8% in Q1 2023, up from 81.5% a year earlier.
Meanwhile, Prime, Grade A, and Grade B asking rents have grown by 19.1%, 8.8%, and 10.7%, respectively, the report showed.
The scarcity of new developments in the capital will also be a “significant concern” going forward, the report added, especially since new supply delivered is increasingly being pre-leased.
“With government-related entities being a majority occupier of space as well, this is at times crowding out the private sector.”
In Dubai, occupancy levels have also increased in the office sector, while average Prime, Grade A, Grade B, and Grade C asking rents have increased by 20.2%, 13.5%, 18.7%, and 28.7% respectively.
As of Q1 2023, average rents across several segments have surpassed the levels registered in early 2019, CBRE said.
(Writing by Imogen Lillywhite; editing by Brinda Darasha)
