U.A.E. real estate market reveals strong growth in Q2 of 2024
Date
7/24/2024 5:50:30 AM
(MENAFN) Jones Lang LaSalle (JLL) has released its latest report detailing the performance of the UAE Real estate market for the second quarter of 2024. The report highlights that the robust economic conditions, diverse demand, and an emphasis on high-quality and sustainable office spaces are driving the positive performance of the office space sector across the country.
In the retail sector, the second quarter witnessed strong demand, particularly for spaces in regional and super-regional malls. Dubai experienced a notable 16 percent increase in average rental rates at primary and secondary shopping centers compared to the previous year. The office market in Dubai also saw an expansion with an additional 20,000 square meters of leasable space, raising the total to approximately 9.26 million square meters. This new supply includes high-quality Grade A office spaces in Umm Ramool, with further expansions expected to add around 18,000 square meters in the next two quarters. In contrast, Abu Dhabi's office supply remained relatively stable at 3.95 million square meters, with 7,500 square meters delivered in the quarter and an additional 125,000 square meters projected for completion by Q2.
The report indicates that strong demand and increased leasing activity have contributed to rising rents in both Dubai and Abu Dhabi. In Dubai, average rents for Grade A office space in the Central Business District increased by 15 percent year-on-year to AED 2,630 per square meter per annum, leading to an 8 percent drop in vacancy rates. Similarly, Abu Dhabi saw a 10 percent rise in average rents for Grade A office space, reaching AED 2,085 per square meter per annum, with vacancy rates falling to 21 percent. The retail market also saw significant demand, with most landlords leveraging limited availability and growing demand to increase rental rates. While Dubai experienced a 16 percent year-on-year increase in average rents at shopping centers, Abu Dhabi saw an 11 percent rise.
Overall, the retail supply in both cities remained stable, with 4.8 million square meters in Dubai and 3.15 million square meters in Abu Dhabi. The second half of the year is expected to introduce an additional 58,000 square meters of gross leasable area (GLA) in Dubai and 85,000 square meters in Abu Dhabi, primarily through local and regional shopping malls.
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