A number of completed buildings in the Northern Emirates are expected to obtain electricity connections in 2012, leading to further rental declines in 2012, Asteco Property Management said in a report today.
“Rental rates in the Northern Emirates will remain stagnant at the beginning of the year, with further declines expected for the latter half,” said Elaine Jones, CEO, Asteco.
She added that tenants should continue to expect rent-free periods currently being offered by landlords as sops to ensure occupancy. “Rent-free periods are expected to continue in the New Year,” she said.
“A number of buildings in Fujairah and Ras Al Khaimah are expected to obtain electricity connection from FEWA in 2012. Therefore, the number of available units will increase and rental rates are likely to drop,” Jones added.
According to the Asteco report that analysed rentals in the Northern Emirates for the fourth quarter of 2011, apartment rents in Sharjah were the highest among its peers in the Northern Emirates, while rents in Umm Al Quwain were the lowest.
“The demand trend for apartments in the Northern Emirates has primarily been families looking for larger two and three-bedroom units. Families tended to relocate within the same emirate due to children’s schooling and value-for-money units,” she said.
The report puts the average yearly rental for a three-bedroom apartment in Sharjah in the range between Dh35,000 and Dh63,000 in the fourth quarter, compared with between Dh35,000 and Dh40,000 in Umm Al Quwain.
Rental rates for three-bedroom villas in Sharjah went for an average of Dh70,000 in both Al Khan and Shargan, and Dh77,500 in Al Quz.
In order to spur demand over the past three months, landlords in Sharjah and Ajman offered rent-free periods of one to two months with no commission for new projects there, Asteco said.
Sales activity for both residential properties and offices in the Northern Emirates was limited throughout the year and some completed buildings in Sharjah,
Fujairah, Ajman and Ras Al Khaimah remained empty due to a lack of utility connections and inadequate sewage.
Nevertheless, Asteco maintains that connectivity problems throughout the Northern Emirates as a whole will continue, and are expected to be resolved at a slower pace due to the high number of buildings marked for completion and handover.
Bureaucracy continued to prompt more existing businesses in Sharjah to move to neighbouring Dubai and Ajman Free Zone in the fourth quarter with other emirates expected to compete heavily for Sharjah business early this year, the report said.
|Dubai house rents declined by
up to 10 per cent in 2011