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Dubai Real Estate Market Overview - Q2 2011

Q2 2011 Highlights:
  • The residential market has seen selective recovery, with villa rents growing by 4% in certain established areas, while apartment rents continued to decline (by 1%).

  • Dubai's office market has seen little movement in either rents or occupancy levels in Q2, but further supply deliveries are likely to result in further downward pressure on rents and occupancies later in 2011 as the market remains tenant favourable. 

  • Retail mall rentals have remained unchanged over the past quarter, with the increase in tourist arrivals and the lack of new supply contributing to stability. Since many retailers expect better business in the third quarter, we anticipate that rental levels will remain roughly stable over the coming months, marking the bottom of the current cycle.

  • Dubai's hotel market continued to perform well, with occupancy rising to 81% and Average Daily Rates (ADRs) stabilising. Beach hotels registered the strongest improvement, evidenced by a 3% growth in ADRs and 11% growth in revenue per available room compared to the same period last year. Although supply is still expanding, the upward trend in tourist arrivals is expected to sustain the recovery.

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