(MENAFN - Cavendish Maxwell) • UAE-wide report provides key insights into residential, commercial, industrial, hospitality and retail sectors
• Price and rent research and analysis of real estate trends throughout the seven emirates
• Key new projects and master developments in the UAE to continue to impact prices
Cavendish Maxwell, a leading property consultancy and chartered surveying firm in the Middle East, released its UAE Market Report for Q1 2019, containing key property data and trends for Dubai, Abu Dhabi and the northern emirates. The report is the firm’s first comprehensive quarterly report on the health of the UAE’s property market as a whole, covering the residential, commercial, industrial, hospitality and retail sectors. The industry report was compiled by the firm's in-house strategic consulting and research team, drawing on proprietary data from its real estate intelligence platform, Property Monitor, and in collaboration with its extensive client and partner portfolio.
Commenting on the report, Manika Dhama, Head of Strategic Consulting and Research at Cavendish Maxwell, said:
“The overall performance of the UAE’s real estate market remained subdued during Q1 2019. With a marked slowdown in 2018, the government has been swift in introducing measures including increased spending, new regulations and revised policies to raise investor sentiment. However, with more supply expected to be added throughout 2019 – and we have already seen a substantial number of units handed over in Q1 – we expect prices and rents for residential units to continue to decline amid soft demand.”
While demand for certain commercial and industrial properties improved marginally in Q1 2019, the report highlights that some prospective occupiers were still underserved, with an overall trend of flight-to-quality and more affordable rents. Commenting on the performance of the industrial and logistics sector, Andrew Love, Partner and Head of Investment and Commercial Agency at Cavendish Maxwell, said:
“The market was still challenging in Q1 2019, with the gap in the local two-tier segment widening as occupiers continue to seek better value. We have noticed an uptick in demand in free zone areas, especially in Dubai and Abu Dhabi, and some sub-categories have outperformed general market estimates. With landlords offering flexible lease terms and economic incentives, and as strategic areas like Dubai South grow, demand is expected to increase.”
Key market insights
The Q1 2019 UAE Property Market Report from Cavendish Maxwell revealed several key insights and trends in local real estate markets, which will likely continue into 2019.
In Dubai’s residential sector, the price of villas/townhouses remained relatively stable at an average of AED 1.8 million, while apartment prices traded around AED 1.2 million on average. In the same period, Abu Dhabi’s major investment zones witnessed an average price drop of 9.6% for apartments and 10% for villas/townhouses. Significant masterplan projects in the northern emirates, including Sharjah Sustainable City and Fujairah Beach Community, will add more freehold investments opportunities in 2019. Additionally, more than 2,000 units are expected to be handed over in Ajman.
Subdued consumer spending, as a result of slower job growth and correction of salaries in Q1 2019, impacted retail and office sectors across the UAE. Vacancy levels in malls rose in some emirates, while new supply is expected to continue to put downward pressure on rents. New office space, particularly in Dubai and Abu Dhabi, once delivered in 2019, will also impact rents. However, demand for Grade A fitted offices continued to be high in Q1 2019.
Dubai’s hospitality market benefitted marginally from the Dubai government’s incentives like free limited-stay visas for transit passengers and a VAT refund scheme for tourists. However, hotel occupancy rates declined by 3.1%, according to data from STR Global from February 2018 to February 2019. In the same period, Abu Dhabi City hotels witnessed a 3.8% increase in occupancy. With new resorts, tourism facilities and government-backed initiatives, the northern emirates are also expected to benefit from increasing tourism numbers and occupancy in the coming years.
Industrial areas of Sharjah and Ajman saw increased demand in Grade A warehouse stock, with an upswing in enquiries for modern facilities as occupiers continue to seek better infrastructure. New areas like Khalifa Industrial Zone Abu Dhabi (KIZAD) also saw higher demand, particularly for warehouse space with serviced offices. As the popularity of online shopping and same-day delivery continues, the demand for high-quality storage space is expected to rise in 2019.
For more detailed information, in-depth analysis and the complete market outlook, download your copy of the Q1 2019 UAE Property Market Report from Cavendish Maxwell here: