UAE commercial property price to see modest decline
Business 24-7 reports: Stable commercial real estate prices in the UAE unaffected so far by the global economic downturn will witness a modest decline this year, market analysts said. The supply-demand gap for office space is still wide as the expected delivery of towers, such as Business Bay, has been delayed, they said.
With these projects expected to complete this year, more commercial space availability will result in a natural drop in prices, they added. These views followed the release of three reports this week by Asteco, Real Capital Analytics and CB Richard Ellis (CBRE). These market reports indicated that commercial real estate survived 2008 – ending flat on sales prices and slightly lower on rental prices for the last quarter.
Latest research from CBRE showed that prime rents in each of the three main commercial property sectors – office, retail and industrial – remained static in the fourth quarter of 2008. However, rental growth in 2008 as a whole reached 50 per cent for industrial buildings, 29 per cent for offices and 18 per cent for retail.
Asteco reported that office sales prices maintained stability posting an average growth rate of 10 per cent last year. Research by Real Capital Analytics suggested that year-on-year commercial property sales doubled in 2008, with property jumping 148 per cent to $3.12 billion.
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Posted by: Nina Turner