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Abu Dhabi rents stable in Q4 as delays limit supply

By Muzaffar Rizvi  www.khaleejtimes.com

ABU DHABI – Residential rents in Abu Dhabi may face downward pressure in 2012 following the completion of delayed projects in the city, adding to the number of homes on the market, a report sid on Tuesday.

Asteco Property Management in its second-half report for 2011 said the emirate’s residential property sector stabilised in the fourth quarter as project handover delays limited the delivery of new supply. Leasing activity, up significantly this year from 2010, is expected to remain strong next year.

“Following a sustained period of rental declines, we have seen some stabilisation over the last three months, particularly at the top end of the market due in part to a slowdown in transactional activity,” said Elaine Jones, chief executive of Asteco Property Management, said in an e-mailed statement to Khaleej Times.

She said some tenants chose to renew leases in existing premises at lower rents and wait for new projects to become available.

The Asteco report said Abu Dhabi rental rates are expected to fall further next year, with more than 24,700 new homes scheduled for completion.

Of the new homes, 18,800 are apartments and 5,950 are villas, the report said adding that about 12,000 units are expected for completion in the first half of the year. New deliveries in 2012 include the first residences on Saadiyat Island, as well as additional projects on Reem Island and Raha Beach.

According to Asteco, 6,680 apartments and 3,600 villas will be handed over this year, far below forecasts due to the continued handover delays within the major projects.

“The delay in handover this year will only exacerbate the volume of new supply delivered in 2012, and consequently, rents will again come under further downward pressure,” Jones remarked.

The Asteco report said Abu Dhabi’s residential property sector stabilised in the fourth quarter as project handover delays limited the delivery of new supply. “Apartment and villa rents were broadly unchanged in the fourth quarter of 2011 compared to the previous quarter,” it added. More info

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