Average apartment rents in Sharjah have risen by 10 to 15 per cent in the past six months, with another surge expected in the coming six months, says a new report.
According to Cluttons, a real estate consultancy, the increase in rent is due to demand outstripping supply for the first time since the global financial crisis.
Apartments in popular areas such as Al Majaz, Al Nahda and Al Qassimiya saw an average rental increase of 10 to 15 per cent since October 2012. In areas such as Sharghan, Al Fisht and Al Falaj, villa rents went up a similar 15 per cent due to strong growth in demand and a lack of quality stock.
These increases were applicable only to new lettings since the rental by-law of the emirate prohibits the landlord from raising rents for three years after signing the lease agreement and every two years thereafter.
In February, Emirates 24/7 reported that apartment rents for prime communities in Sharjah had gone up by 15 to 20 per cent.
Landlords, who were asking for Dh22,000 per annum (pa) for one-bedroom houses on Al Wahda Road six months back, were asking new tenants to pay Dh27,000 pa, an increase of nearly 22 per cent.
In the Corniche area, leasing rates for one-bedroom houses on average shot up to Dh35,000 pa, previously Dh28,000 pa, while in Al Majaz area rents on average were Dh32,000 pa (Dh28,000 pa).
Although in mid-April, the new Salik toll gate became operational on Ittihad Road, Cluttons says the effect on neighboring property prices was yet to be seen.
However, it believes that there won’t be any significant impact on rents, as commuters might move to take alternative roads such as the 311, which is currently under expansion.
With the UAE economy continuing to improve, the real estate consultancy expects the residential market will continue to strengthen with rents (apartments and villas) to rise over the next six months.
The Sharjah office market, however remained unchanged since October 2012, with average rents in the main business districts holding between Dh50 and Dh80 per square foot.
Landlords are offering flexible lease agreements, which have helped attract tenants and increase occupancy rates. Besides, increasing demand for on-site amenities such as gyms, restaurants and cafes, and extensive renovation work has been undertaken on some older properties, further enhancing the desirability of Sharjah’s office market.
“We expect the current market trend to continue over the next six months, driven also by Sharjah’s position as a good start-up location for smaller businesses,” the consultancy said.