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JLL, the world's leading real estate investment and advisory firm, today has released its fourth quarter (Q4 2014) Abu Dhabi Real Estate Overview report covering the office, residential, retail and hospitality market sectors.
Commenting on the report, David Dudley, Regional Director and Head of Abu Dhabi Office at JLL, Middle East & North Africa, said: "Our report highlights a short-term softening of the residential market. Following two years of 25% annual growth, average prime residential prices have remained flat for the first time since Q1 2013 – principally due to the recent decline in oil prices, equities markets and investor sentiment. The residential rental market has also softened. While average prime residential rents increased by 4% during Q4 2014, rental growth is expected to reduce from double-digit annual growth to single-digit growth this year, due to the impact of an expected slowdown in government spending.
"As for other sectors, Abu Dhabi's office market continues to recover, albeit at a modest pace. Following the stabilisation of prime office rents from mid-2012 to mid-2014, rents have witnessed 5% quarterly growth for the second successive quarter as demand remains steady, annual supply completions reduce and vacancy rates reduce. The Hospitality and retail markets remain relatively stable. Hotel occupancy rates improved, but ADRs remain under pressure. The retail market has seen the opening of Abu Dhabi's largest mall (Yas Mall) over the past quarter and while no further significant completions are forecast for 2015/2016, there are a number of major new super-regional malls proposed to open in 2017/2018."
Summary highlights, Abu Dhabi Market Overview, Q4 2014:
David Dudley, concluded: "The medium term market outlook remains positive, driven primarily by major government-backed economic development and infrastructure projects. Following the recent decline in oil prices, we expect that some projects may be phased outwards; however the government remains committed to the 2030 Vision of establishing a world-class city and diversified economy.
"Development opportunities remain in selective sectors and sub-sectors and there will remain two tier market performance with significant divergence between high and low quality product (in terms of quality of location, design, functionality, asset management etc.).
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