(MENAFN - Khaleej Times) Real estate transactions in the UAE are forecast to rise in the coming months following a second quarter that witnessed improved market sentiment, the findings of a survey show.
During the second quarter of 2012, sentiment in the UAE real estate investment market improved, driven by increased availability of funds for investments, the Royal Institution of Chartered Surveyors, or Rics said in its latest Global Commercial Property Survey.
The Rics Survey said purchaser enquiries rose for the second consecutive quarter and transactions are forecast to rise in the coming months.
"Significantly, expectations for capital values in the UAE for the third quarter show a modest increase for the first time since 2008," it said.
Some16 per cent more respondents in the survey indicated that money available for investment in real estate increased during the second quarter of the year. Occupier demand, led by an active retail sector, continued its rise, though at a slightly slower pace. New supply coming on to the office market adds to existing stocks so that despite the recovery in demand the oversupply situation continues to impact upon rental expectations.
Simon Rubinsohn, Rics Chief Economist, said it was encouraging that there are now some tentative signs of a turn in the real estate market in the UAE. "At the moment, this is more visible in the investment market and it will take some take some time to work off the excess space that has built up in recent years."
Therefore, he said it might be premature to envisage any upturn in rent levels but after a torrid period, the indications are that that they are at least now close to stabilising.
A leading property expert, Jones Lang LaSalle, or JLL, in a report has said that there are signs of investor confidence returning to Dubai as the investment market continued to witness "strong interest for high quality, well located, income producing assets." The report cited two major transactions in 2012 to underscore the point. One transaction was the sale of Building 6 in Gate Precinct, DIFC. The other was a debt to equity swap of office and residential space in Index Tower and Limestone House in DIFC between Emirates NBD and Union Properties for a value of Dh 1.1 billion.
"A total of 3,000 additional residential units were added to the market in the first quarter of 2012 thus taking the current residential stock to 341,000 units," JLL said in its report, 'Dubai Real Estate Market Overview " Q1 2012.'
Globally, the Rics survey said that following on from strong first quarter results, the real estate market in North America and Canada remained buoyant in both occupier and investor markets despite the global economic slowdown.
China and Hong Kong also appeared to have relatively resilient occupier markets for the time being.
However, the survey showed a generally weaker picture across Europe, with signs of stress spreading from the periphery to other markets.
Greece, Spain, Portugal, France and Italy in particular showed signs of distress during the second quarter of the year, with both sentiment and activity levels suffering on the back of elevated uncertainty.
