Q-o-Q Percentage Change Jun 2012 Sep 2012 0% -2% -4% -6% 2% 4% 6% 8% 10% -50% -40% -30% -20% -10% 0% 10% 20% 30% Apartment Sales Villa Sales Office Sales Apartment Rentals Villa Rentals Office Rentals Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep 2008 2009 2010 2011 2012 Customer Management: +971 600 54 7773 | www.astecoreports.com Dubai Focus Q32012 With over 25 years’ experience in the Middle East, Asteco’s Professional Services team brings together a group of the Gulf’s leading real estate experts. Asteco’s network of offices in Abu Dhabi, Al Ain, Dubai, Northern Emirates, Qatar, Bahrain and Jordan not only provides a deep understanding of local markets but also enables us to undertake large instructions where we can quickly apply resources to meet the client’s requirements. Real Estate Monitor The line graph below demonstrates the average percentage sales and rental trend on a quarterly basis. Residential Rental rates for apartments and villas saw marginal increases since Q2 2012 with 2% and 3% respectively. The rise is generally due to the lack of a certain unit type, whether that is larger apartments such as 3 BR units in towers or smaller townhouses in villa communities. The reason for the shortage of a particular unit type is either the low number of units initially available in the development or the high occupancy rates within certain projects. Asteco has also witnessed a rise in rates in emerging communities such as Jumeirah Village which is partly due to the increasing rents in established developments and consequent outflow of residents unwilling or unable to pay the hiked rate. In addition, demand is picking up as infrastructure, landscaping and retail provision improve. After seeing some marginal increases in the beginning of the year, sales prices for residential units remained unchanged over the last three months. Although an increasing number of units are advertised at inflated prices, we believe owners are merely testing the waters as they are in no rush to sell and these properties are unlikely to move. Highlights Commercial There has been no movement in office sales prices and rental rates over the last three months mainly due to the lack of demand and transaction activity. The summer coinciding with Ramadan has resulted in lower enquiry levels and consequently limited take-up. Competition to secure a tenant/buyer among owners/landlords is increasing as clients are demanding significant discounts, incentives or flexibility before committing to a purchase/lease agreement. This trend is likely to continue as more supply enters the market. Furthermore, the strata-title ownership of many office buildings in Dubai deters potential buyers/tenants seeking larger space such as half, whole or multiple floors. Shell and core offerings are also a disincentive. The long-awaited company law as well as various government initiatives such as offering certain fee exemptions to small and medium entrepreneurs (SMEs) to save costs will hopefully fuel demand and result in increased take-up.
Transcript
Q-o
-Q P
erce
ntag
e Ch
ange
Sales Price (Q3) Percentage Change
DIFC DiscoveryGardens
Down-townDubai
DubaiMarina
Greens JumeirahBeach
Residence
JumeirahLakes
Towers
PalmJumeirah
Sales Price (Q3) Percentage Change
Sales Price (Q3) Percentage Change
AED
/m2
Arabian Ranches
Dubai SportsCity
(Victory Heights)
GreenCommunity
JumeirahIslands
JumeirahVillage
Meadows PalmJumeirah
Springs
Business Bay DIFC DubaiInvestment
Park
DubaiSiliconOasis
JumeirahLakes
Towers
Tecom C
Jun 2012 Sep 2012
0%
-2%
-4%
-6%
2%
4%
6%
8%
10%
AED
/m2
AED
/m2
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
Apartment Sales Villa Sales Office Sales Apartment Rentals Villa Rentals Office Rentals
Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep 2008 2009 2010 2011 2012
With over 25 years’ experience in the Middle East, Asteco’s Professional Services team brings together a group of the Gulf’s leading real estate experts.
Asteco’s network of offices in Abu Dhabi, Al Ain, Dubai, Northern Emirates, Qatar, Bahrain and Jordan not only provides a deep understanding of local markets but also enables us to undertake large instructions where we can quickly apply resources to meet the client’s requirements.
Real Estate MonitorThe line graph below demonstrates the average percentage sales and rental trend on a quarterly basis.
Residential
Rental rates for apartments and villas saw marginal increases since Q2 2012 with 2% and 3% respectively.
The rise is generally due to the lack of a certain unit type, whether that is larger apartments such as 3 BR units in towers or smaller townhouses in villa communities. The reason for the shortage of a particular unit type is either the low number of units initially available in the development or the high occupancy rates within certain projects.
Asteco has also witnessed a rise in rates in emerging communities such as Jumeirah Village which is partly due to the increasing rents in established developments and consequent outflow of residents unwilling or unable to pay the hiked rate. In addition, demand is picking up as infrastructure, landscaping and retail provision improve.
After seeing some marginal increases in the beginning of the year, sales prices for residential units remained unchanged over the last three months.
Although an increasing number of units are advertised at inflated prices, we believe owners are merely testing the waters as they are in no rush to sell and these properties are unlikely to move.
Highlights
Commercial
There has been no movement in office sales prices and rental rates over the last three months mainly due to the lack of demand and transaction activity.
The summer coinciding with Ramadan has resulted in lower enquiry levels and consequently limited take-up.
Competition to secure a tenant/buyer among owners/landlords is increasing as clients are demanding significant discounts, incentives or flexibility before committing to a purchase/lease agreement.
This trend is likely to continue as more supply enters the market.
Furthermore, the strata-title ownership of many office buildings in Dubai deters potential buyers/tenants seeking larger space such as half, whole or multiple floors. Shell and core offerings are also a disincentive.
The long-awaited company law as well as various government initiatives such as offering certain fee exemptions to small and medium entrepreneurs (SMEs) to save costs will hopefully fuel demand and result in increased take-up.
DISCLAIMER: The information contained in this report has been obtained from and is based upon sources that Asteco Property Management believes to be reliable, however, no warranty or representation, expressed or implied, is made to the accuracy or completeness of the information contained herein, and same is submitted subject to errors, omissions, change of price, rental or other conditions, withdrawal without notice, and to any special listing conditions imposed by our principals. Asteco Property Management will not be held responsible for any third-party contributions. All opinions and estimates included in this report constitute Asteco Property Management’s judgment, as of the date of this report and are subject to change without notice. Figures contained in this report are derived from a basket of locations highlighted in this report and therefore represent a snapshot of the Dubai market. Due care and attention has been used in the preparation of forecast information. However, actual results may vary from forecasts and any variation may be materially positive or negative. Forecasts, by their very nature, involve risk and uncertainty because they relate to future events and circumstances which are beyond Asteco Property Management’s control. For a full in-depth study of the market, please contact Asteco Property Management’s research team. Asteco Property Management LLC. Commercial Licence No. 218551. Paid-up Capital AED4,000,000.
Apartment Rental Rates and Percentage Change (Q2-Q3 2012)
Apartment Sales Prices and Percentage Change (Q2-Q3 2012)
Villa Rental Rates and Percentage Change (Q2-Q3 2012)
Villa Sales Prices and Percentage Change (Q2-Q3 2012)
Office Rental Rates and Percentage Change (Q2-Q3 2012)
Office Sales Prices and Percentage Change (Q2-Q3 2012)
