Dubai property buoyant in first half of the year

Limited supply and buoyancy in Dubai’s industrial property market have helped push up rents in some areas by as much as 50 per cent for the first half of the year, according to a latest report by property consultancy Knight Frank.

The new figures back up evidence of a continuingly strong property market spanning the industrial, retail and residential sectors in the emirate.

“Rental values in seven of the nine districts that we track experienced double-digit growth, with Class 2 buildings in Dubai Investments Park (47 per cent), Jebel Ali (39 per cent) and Ras Al Khor (36 per cent) performing especially well. However, that’s not to say that Class 1 buildings did badly; year-on-year, rents were up 29 per cent, 12 per cent and nine per cent in this category in Dubai Investment Park, Jafza and Al Quoz, respectively,” the report said.

In Dubai, enquiries for industrial property were significantly stronger in the first half of the year compared to six months earlier, the report said, but matches with the right property could be hard to come by.

“Due to the limited availability of stock, leasing deals were few and far between,” it said. “Not surprisingly then, industrial rental value growth was fairly muted at one per cent quarter-on-quarter between April and June 2014.”

During the January to June period, strong growth in Dubai’s retail sector was primarily responsible for stimulating demand for warehouse and distribution facilities. However, since good quality buildings remain in short supply, some occupiers are finding themselves settling for units of lesser quality.

Moreover, development activity has surged in Al Quoz, Ras Al Khor and Rashidiya as older buildings in these areas reach the end of their lifecycle. However, with plots typically sized between 30,000 sqft and 50,000 sqft, they are likely to be too small to meet larger occupiers’ needs. In Al Quoz, the recent completion of infrastructure construction work has improved the area’s connectivity, which in turn helped boost take-up of industrial property in H1 2014.

Top locations

A research out from the property search website, propertyfinder.ae, has revealed the top places for buying and renting across Dubai and Abu Dhabi. The site’s newly released quarter two report also compares asking sale and rental prices in prime areas in the two emirates.

While Dubai studio prices stand at Dh959,000, an average one-bedroom in the city costs Dh1.7 million and a two-bedroom apartment Dh3 million. Topping the rankings for the most searched communities in Dubai amongst prospective buyers is Dubai Marina.

“Dubai Marina has been at the top of our rankings for over two years now — no small feat in a city like Dubai where new developments are being launched every other week. The community is where everything is at — business centres, beaches, entertainment, gorgeous views, stylish pads and hip nightlife,” said Renan Bourdeau, deputy CEO of propertyfinder.ae.

— abdulbasit@khaleejtimes.com