Abu Dhabi’s of­fice real es­tate re­mains slug­gish

The National - News - - BUSINESS - JEN­NIFER GNANA

Abu Dhabi’s real es­tate sec­tor re­mained slug­gish with no new of­fice space in­ven­tory com­ing on to the mar­ket as a re­sult of slow com­mer­cial ac­tiv­ity, real es­tate com­pany JLL said in a re­port.

The com­mer­cial sec­tor re­ceived no new de­liv­er­ies dur­ing the third quar­ter of this year, ac­cord­ing to the com­pany’s lat­est UAE Mar­ket Re­port for the third quar­ter, with to­tal of­fice stock for Abu Dhabi re­main­ing at 3.8 mil­lion square me­tres of gross leasable area. This refers to the amount of space avail­able for rent in a com­mer­cial prop­erty.

“De­mand for of­fice space in Abu Dhabi re­mains lim­ited as oc­cu­piers con­tinue to fo­cus on con­sol­i­dat­ing their op­er­a­tions and down­siz­ing their space to smaller units,” the com­pany said in the re­port. “As a re­sult, there re­mains ac­tive de­mand for smaller sized units less than 100 square me­tres, and ser­viced of­fice space, pri­mar­ily for li­cens­ing pur­poses.”

Rents for Grade A of­fice space have fallen 6 per cent year-on-year in the cap­i­tal, and the amount of va­cant space in­creased to 27 per cent of to­tal stock.

Abu Dhabi has made a raft of changes to boost for­eign in­vest­ment, par­tic­u­larly in real es­tate this year. In April, the gov­ern­ment amended real es­tate laws al­low­ing for­eign­ers to own free­hold prop­erty in des­ig­nated zones to in­crease for­eign di­rect in­vest­ment and boost the econ­omy. Own­er­ship of prop­erty was pre­vi­ously only al­lowed for UAE and GCC na­tion­als. For­eign in­vestors in in­vest­ment zones were granted lease­hold ar­range­ments with a max­i­mum 99-year time pe­riod.

JLL said re­lax­ing rules on for­eign own­er­ship would stim­u­late de­mand in the lon­grun. Abu Dhabi’s mid-mar­ket res­i­den­tial seg­ment, for ex­am­ple, could ad­vance par­tic­u­larly from schemes such as Al­dar’s Saadiyat Re­serves on Saadiyat Is­land. The de­vel­oper is also look­ing to ramp up for­eign in­vest­ment through dis­counted of­fers on 10 of its de­vel­op­ments.

Newspapers in English

Newspapers from UAE

© PressReader. All rights reserved.