Smaller apartments in demand in Abu Dhabi

DUBAI — Redundancies and cuts in staff housing allowances are weighing on rents of larger apartments and villas in Q3 in Abu Dhabi. Tenants are increasingly downgrading accommodation in the wake of economic uncertainty. Consequently, smaller apartments which offer more value for money are more in demand, says consultancy Asteco.

John Stevens, managing director, Asteco, said: “The majority of vacant apartments, which were offered at reduced rates in Q2, have now been leased, especially the smaller unit types [studio, one- and two-bedroom]. This indicates that there is demand in the market, but value for money is the most important factor. In comparison, rents for larger and more expensive threeand four-bedroom duplexes and townhouses have fallen by 10 per cent since the last quarter, with a high percentage remaining vacant for over six months.”

Villa rents were down, on average, by two per cent in Q3 from Q2. The highest drop was in Al Raha Gardens (six per cent) followed by Al Raha Beach Villas (four per cent). Demand for older villas inside Abu Dhabi city has also dampened with premium units most affected, with an average decline of 10 per cent since Q3 2015.

Rents for prime apartments on Saadiyat Island remained stable in Q3, while other prime apartments recorded a one per cent decline in rents compared with Q2 2016, falling by an average of six per cent since Q3 2015. High-end units in the Corniche saw rates drop by nine per cent from Q3 2015.