Abu Dhabi real estate market remains stable in Q2, according to the latest JLL Real Estate Market Overview report released Monday.
JLL, the world’s leading real estate investment and advisory firm, today released its JLL’s “Q2 2015 Abu Dhabi Real Estate Overview” said the period saw continued stabilization across all asset classes, following the 2013-2014 market recovery.
The pace of demand growth has slowed due to the decline in oil prices affecting the strength of the oil sector and leading to a reduction in government spending and sentiment.
While short-term supply remains under control, the extent to which stable market conditions will continue very much depends on government spending plans.
For the Residential Sales market, while prices have remained stable over Q2 2015, there has been continued downward pressure on transaction volumes due to the decline in sentiment, although developers are still generally successful with new product launches.
Residential Rents have remained stable this quarter due to limited demand growth, but with vacancies remaining low in high quality, well-located schemes.
Office demand remains subdued due to contraction in some sectors and a slowdown in the oil sector and government infrastructure investment.
In spite of this, Grade A office rents have remained stable due to minimal vacancies in quality stock. Further office completions throughout the year are expected to increase the market-wide vacancy rate, but with Grade A rents being upheld.
Retail Rents remained stable this quarter and this is expected to continue in the short-term. A number of Super Regional malls are set to enter the market from 2018, which will partly be supported by new population and tourism growth, but will also cause the market to polarize between high and low grade stock.
The Hospitality market witnessed solid growth in hotel guests above 2014 levels driven by wide ranging initiatives to grow the tourism sector. ADRs have also registered an increase of 4% in YT May compared to the same period in 2014. Hotel occupancies registered 77% in YT May reaching the same levels as 2014.
