JLL releases Abu Dhabi Real Estate Market Overview for Q1 2019
JLL, the world’s leading real estate advisory firm, released its Abu Dhabi Q1 Real Estate Market Overview today at Cityscape Abu Dhabi, reporting subdued conditions and relatively unchanged performance across most sectors.
An uplift in market sentiment is expected in the long run following government initiatives announced in 2018 to stimulate demand and drive diversified economic growth from the capital’s real estate sector, but these initiatives have had little impact to date.
The office market saw an increased number of enquiries in the first quarter and is expected to stabilise by the end of 2019, with limited expected declines in rent for Grade A space.
“In the long run, demand for office space could be generated by the easing of regulations and the major stimulus package announced by the government last year. Demand could also come from private sector businesses following the new law formalising the public-private partnership (PPP) program,” said Peter Stebbings, Head of Abu Dhabi Office, JLL.
“Overall we expect market sentiment to improve given these significant government initiatives launched to boost overall demand and to energise the market. However, the benefits of these measures will likely be seen overtime as industry players and investors continue to be cautious during current times of uncertainty,” he continued.
In the residential and retail sectors, occupancy levels remained largely unchanged with rents continuing to decline due to subdued market sentiment and limited demand. These marketplace conditions also led to declined residential sale prices, affected by the continued reduction in transaction volumes.
The hospitality market registered a significant increase in ADRs at 19% to reach USD 138, attributed mainly to a number of high profile events allowing hotels to capitalise on an increase in visitors to the capital. Occupancy levels remained stable at 79% in YT February 2019, compared to the same period last year. With limited levels of new room supply expected in 2019 and 2020, the hotel sector could begin to recover ahead of other sectors of the market from 2020 onwards.