New Supply, New Problems - Abu Dhabi Rents Expected To Fall FurtherWednesday, August 01, 2012
 Jones Lang LaSalle highlights in its recent report that future additions to property supply is expected to further lower rents in Abu Dhabi during the followings year. Due to delivery of high quality projects across all the sectors in Abu Dhabi, the property sector of federal capital is becoming competitive and tenant friendly.
The report also highlights that during the period of tight economic conditions and weak property demand, the glut of oversupply in the emirate resulted in rental declines. During the first quarter of the year, price of Abu Dhabi properties fell by only 4% but during the 2nd and 3rd quarter, the new supply of 9,000 units (residential) are expected to cause problems for the Abu Dhabi real estate.
The director of Jones Lang LaSalle, Craig Plumb, says that liquidity constraints and increasing oversupply is expected to further cause decline in Abu Dhabi property prices this year. The new supply of hotel, office, residential and retail projects are expected to be added to the property stock this year which can push the rates down from their sustainable highs. He also says that despite these concerns, Abu Dhabi property market is good for realtors and investors.
The report also reveals that the actions taken by the government to protect investors through introduction of policies and laws have been reflected in Jones LaSalle Transparency Index. This index ranks Abu Dhabi as the 2nd most transparent spot in the ‘MENA Region’ while Dubai was ranked on first position. This index can play a key role in regaining investors’ confidence in the region.
As per Head of Abu Dhabi office, Jones Lang LaSalle MENA, David Dudley, during Q2 approximately 2,900 residential units were added to the market in Rihan Heights in Grand Mosque District, Amaya Towers on Shams, two towers on Marina Square and villas in Bloom Gardens. Now the total residential stock in Abu Dhabi by the end of Q2 2012 makes 199,800 units. He further added that during second half of the year, up to 11,000 more units are expected to be added to the market from which, many projects are at the final stages of approval, but can be delayed.
David Dudley also highlighted that majority of new villas supply would be added in Emirati housing communities but apartments would make approximately 2/3rd of upcoming new supply. Master planned developments like Danet, Reem Island, Al Reef Villas, Rawdhat and Saadiyat Island along with Bation Towers, Marasy in Bateen and Al Bateen Park would receive most of the new supply during 2012.
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