Dubai rents rose by an average of 17%

Dubai rents rose by an average of 17% over the last 12 months, with those in some of the most popular areas posting an increase of around 24%, according to CB Richard Ellis (CBRE).

The real estate market in Dubai was hardly hit by the global downturn, where rents have decreased by 54% between the fourth quarter of 2008 and the same period of 2011. Since then, the trend started to rebound thanks to a sustained period of population growth, positive economic performance, increased occupier demand, and limited availability of units in most desirable locations.

In fact, rents in some popular areas such as Downtown Dubai, Dubai Marina, the Greens, Jumeirah BeachResidence, and Palm Jumeirah rose by an average of 24% year-on-year. The positive growth in the real estate market was also reflected by the amount paid by new buyers ,where prices rose by an average of 13%, with 80% of the buyers paying in cash. As to new developments, CBRE estimates that 36,000 new residential units are set to enter the marketover the next three years, whereas 1.895 million sqm of office space will be introduced over the coming two years.

As to Dubai’s office market, it remained characterized by two features. The first is the market beinglocation-specific with occupancy rates on Cheikh Zayed Road averaging 83%. The second is that 60% of developments in the pipeline are made up of multiple owners, which is unattractive to large occupiers.

Souce: 
Group Research Department
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