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Abu Dhabi Apartment Rents Drop Marginally in Q4 2009

Rents for lower quality units fell up to 20 per cent in the fourth quarter of last year, whereas higher quality apartments saw rents declined by10 per cent, the Landmark Advisory said in a statement here on Tuesday. “For example the average rent for a 2-bedroom apartment in Al Khalidiyah, fell by 11 per cent from Dh 225,000 to Dh 200,000,” the statement said quoting LLJ Property’s Leasing Manager, Andrea Menown.

“The growing availability of units and a revival in market activity after a traditionally slow summer period have resulted in a minor downward fluctuation in the cost of renting in Abu Dhabi,” Elaine Jones, CEO of Asteco said in a statement presenting the fourth quarter rent survey results, 
here on Monday .

Interestingly, rents in Dubai have on average remained stable over the last quarter. But, apartments which offer superior amenities such as access to a gym, swimming pool and free parking in Dubai are still in the region of over 20 per cent cheaper than in Abu Dhabi, according to Asteco.

“Thus the number of people working in Abu Dhabi but continuing to live or moving out to Dubai is remains noteworthy,” Jones said adding “this trend is not expected to change in the short term without the perceived value for money versus location issue being addressed.”

“Landlords are growing more flexible in rent negotiations to attract tenants. Previously, rentals were virtually non- negotiable, but today we are in some cases seeing a margin of up to 10 per cent, with the greatest margins achievable on high end properties,” said Menown.

According to the Asteco experts around 2,000 new apartments are due to be available for lease on the main Abu Dhabi Island during the first half of 2010, with a similar number during the second half, the report says.

In addition, Marina Square, Sun & Sky Towers and Al Bandar will provide around 6,500 apartments by the end of the second quarter 2010 with a further 1,286 units due to come online at Al Muneera by the end 
of 2010.

On villa rents, Asteco reports a mixed picture. “During the last quarter villa rents on the main Abu Dhabi Island declined between 10 to 20 per cent with an increasing number of landlords willing to accept reduced rents to secure tenants quickly,” the report said.

On the other side, the off-island villa developments of Al Raha Gardens and Sas Al Nakhl have witnessed continued healthy demand following sharp reductions in rents earlier in the year. Rents have remained largely stable on average over the last three months, though with the glut of new villas handed over during the summer having been let evidence is emerging that some marginal rental increases are starting to be achieved.

—ramavarman@khaleejtimes.com