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Abu Dhabi Apartment Rents Remain Stable in January

ABU DHABI — Apartment rents in the central areas of Abu Dhabi remained stable in January due to the low movements in the market, a research study by Khaleej Times and property management firm Asteco shows.

But the survey results which were used to create the KT-Asteco Rental Monitor discloses that the rents are likely to come down at least marginally as new units are delivered in the coming months.

The reluctance of the people to shift to new residences in the middle of the academic year in schools could be a major factor for the low movements in the property market and the consequent stability in the rental market, the survey says. Also, no significant number of new units was added to the property market of the capital during the month.

The survey expects that about 3,500 villas and apartment units are likely to be available in Abu Dhabi mainland in the first quarter of the current year. This includes 560 villas, which are progressively being handed over at Al Reef. Some towers will also be delivered on the main island and in the MBZ area in the first quarter, while over 4,000 units will become available in Reem Island in the second quarter of 2010.

All these could lead to a revival of activity in the market and a marginal decline in prices in the next few months in the rental market of Abu Dhabi, the Asteco experts said.

Rents had resumed their marginal downward trend in the capital in November after more than four consecutive months of stability. Increase in availability and revival of market activity after the usually slow summer period were the factors identified by the Asteco analysts for marginally pushing down the rents in Abu Dhabi since November.

New buildings were also being handed over in Mohammed Bin Zayed City area near Mussafah and this was leading to a slide in the rental levels in 
those areas.

Earlier surveys had found that apartment rents in Abu Dhabi were declining from April to June. The growing availability of units, a cash squeeze experienced by many tenants, and an internal shift of population were some of the most important factors contributed to this slide.

But that downward trend paused for the first time in July, when rent levels remained unchanged from the previous month’s level. The stability in the rental market continued till November when the slide resumed, albeit in a slow pace.

The latest survey shows that rents for one bed-room apartments in the sought-after areas such as Corniche, Khalidiyah, Bateen, Khalifa Street and Salam Street remained stable between Dh100,000 to Dh120,000 in December and January. The leasing prices of two-bedroom apartments in these areas also remained unchanged at Dh125,000 to Dh150,000 in December and January. The average rate for three-bedroom apartments in these areas was Dh165,000 to Dh200,000 in December and January.

In areas like ‘Between the Bridges’, Mussafah, Mohammed Bin Zayed City, Khalifa A and Khalifa B, average rent of one-bedroom apartments was Dh70,000 to Dh80,000 in December and January. The rents for two-bedroom apartments in those areas remained unchanged at Dh80,000 to Dh95,000 in December and January. The rates for three-bedroom apartments also remained stable at to Dh110,000 to Dh120,000 in these two months.

The study shows that the average annual rent for a single-room apartment in the Passport Road Area, Defence Road, Tourist Club area, Airport Road and Hamdan Street was between Dh80,000 and Dh100,000 in December and January. Rents for two-bedroom apartments and three-bedroom apartments in these areas also remained stable at Dh110,000 to Dh130,000 and Dh135,000 to Dh165,000 in the two months. It is worth mentioning that the rents quoted are average high and average low over a wide selection of properties within the selected areas and as such individual rents, especially for high quality buildings, can be way above these averages.

· ramavarman@khaleejtimes.com