Abu Dhabi rents will remain under pressure

Dubai

Residential rents in Abu Dhabi will remain under pressure this year and more so if the 6,000 odd new apartments do get handed over. In all, 9,000 residences, including 2,800 villas, are due for delivery through this year, according to an update from Asteco.

The property services firm believes rentals could record “moderate declines as a result of the continuous delivery of new supply during a period of moderate economic and market growths”.

Apartment rents had average quarterly declines of 2-3 per cent during 2017.

The upcoming handovers will primarily take place at Reem Island, Al Raha Beach and on Yas Island.

On the freehold sales side of things, where developers are willing to offer mid-range residential options, investors will queue up. A case in point being Aldar’s The Bridges and Water’s Edge. Market sources say other developers could soon take to this off-plan strategy as well.

It will require developers with office projects to change strategy where they can. “Based on previous years, the delivery of some of this inventory may be postponed,” said John Stevens, Managing Director of Asteco. These include the “delayed office buildings Omega Towers on Reem Island and the ADIB HQ on Airport Road, which were due for delivery in 2017 but are now expected for handover in 2018”.