DUBAI (Jan 5): Real estate specialist Cluttons Dubai is predicting a brisk start to 2012 for the United Arab Emirates' (UAE) real estate market. However despite the positive signs, it noted that the overall situation in Europe and US cannot be ignored, and advises general caution over the potential knock-on effects in the region in respect of debt financing and general liquidity levels.
Having identified general maturing of the marketplace in 2011, Cluttons said in a recent statement that there will be a continuation of many of the trends seen in the residential market, with good quality, well-established developments benefiting from nearby services and amenities.
Established developments will continue to do well at the expense of newer residential areas. the consultancy also anticipates the residential market continuing to gain from increasingly available mortgage finance options at competitive rates.
In the office market, Cluttons anticipates an improvement in occupier demand with increasing numbers of companies looking to relocate into the UAE. This trend can be attributed to the effects of the Arab Spring, and Dubai’s stability and perception as a business "safe haven".
The general oversupply of office stock in the market place and low rents on offer will also continue to fuel occupier movement within the city. Many companies are still going through fairly rigid cost saving and downsizing exercises, noting that more focus has been put on reducing rents and vacant floor space that is no longer needed.
Whilst a general oversupply of office stock will continue to be a feature of the market in 2012, there are signs that rents are beginning to bottom out and further reductions are hoped to be minimal. Rental incentives and flexibility offered by landlords is likely to continue to increase in order to reduce vacancy levels, Cluttons said.
