Commercial realty on upswing too
Capital values and rents of commercial properties in the UAE are set to increase in the coming 12 months, according to Royal Institution of Chartered Surveyors (RICS) Global Commercial Property Market Monitor.
“At the forefront of these trends are the UAE and Japanese real estate markets where the Occupier Sentiment Index (OSI) and the Investment Sentiment Index (ISI) are firmly entrenched in positive territory,” RICS said.
“Significantly, 12 month forward expectations for rents and capital values in both countries are turning progressively upbeat reflecting the expectation that the economic recovery, now underway will continue to gather pace,” it said.
Emirates 24|7 reported earlier that Dubai had been placed third on the list of the world's 20 most dynamic cities following the Expo 2020 win with Jones Lang LaSalle (JLL) referring the emirate to being an "elite city that wields clear economic might on the global stage."
In its Q4 report, the real estate consultancy said that the office leasing market in Dubai had witnessed more activity, boosted by seasonal factors as many corporates acted ahead of year-end. Prime rents had improved as the flight to quality continues to increase demand for the best quality space. The current office stock stood at 7.3 million square metres, with future supply to touch 1.4 million square metres between 2014 and 2016.
In Abu Dhabi, JLL expected improved global and local economic conditions to improve demand and market absorption rates this year. The current office stock stood at three million square metres, with future supply to touch 824,000 square metres by end of 2015.
UK-based Knight Frank has already referred to Dubai leading the world cities in terms of double-digit property price increase in 2014. The expected increase is between 10 and 15 per cent.
Real estate markets around the world are showing more encouraging signals as a result of a generally improving macroclimate with positive indicators for growth increasingly evident across the sector.
RICS Chief Economist Simon Rubinsohn said: “The improving tone to the global economy is not without its challenges but the lessening of downside risk is, more than anything, helping to support commercial real estate markets. The recovery in sentiment in Japan and the UAE continues to gain momentum but the more positive mindset is spreading.”
Other markets posting a firmer trend in both occupier and investor sentiment include the US, New Zealand, South Africa, Russia and China, RICS said.
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