(MENAFN - Khaleej Times) 2100 residential units were delivered to the market: adib report
homes prices in abu dhabi’s investment zones rose up to 20 per cent in the first quarter of 2014 says abu dhabi islamic bank (adib).
the increase in property values was driven by a strong improvement in investor sentiment and partly due to a rising trend in dubai’s real estate sector.
the adib which has a portfolio of 12000 properties in abu dhabi has issued its first report on the real estate. the report covers abu dhabi’s residential office retail and hospitality sectors and features a new adib rental index which highlights the performance of its managed portfolio.
the index is based on data derived from lease renewals and new leases completed during the last three months and will be updated on a quarterly basis. the index covers abu dhabi island which has been subdivided into eight zones and the off-island areas of khalifa city mohammed bin zayed city and shakbout city.
the adib rental index shows rents across its portfolio rose in overall terms by 3.7 per cent during the first quarter of 2014. zones b and d witnessed the highest overall increases of 6.33 per cent and 6.18 per cent respectively whilst zone j had the lowest increase of 1.64 per cent.
paul maisfield chief executive officer of mpm properties the real estate services subsidiary of adib said: “the adib rental index is the first real estate index for abu dhabi that reflects real transaction values rather than quoted values and is therefore a very important contribution to market transparency.”
“the index shows that in overall terms rental rates increased 3.7 per cent during the first quarter but in some cases rents increased by over 20 per cent and even as much as 70 per cent. the highest rises were predominantly at the bottom end of the market — typically with rents below dh40000 per annum.
“the full impact of this change will only become clear over the course of the next few months. our experience to date given the availability in the market and the new supply being delivered landlords are generally taking a sensible approach and seeking a fair market rent in order to sustain good occupancy levels” paul said.
adib’s report said that just over 2100 new residential units were delivered to the market during the first quarter of 2014 with a further 6800 scheduled for completion before the end of the year.
sales prices at aldar properties’ developments al muneera and al zeina at al raha beach witnessed the largest increases of 16-20 per cent followed by the gate towers on reem island and al reef downtown which have both seen the value rise to 13-14 per cent during the first quarter of 2014.
rental rates in investment zones developments have also risen during the same period but at a lower rate typically less than eight per cent across raha beach and reem island meaning that net yields have compressed to below six per cent on average.
unlike raha beach and reem island rental rates at al reef downtown have increased at a marginally higher rate than sale prices meaning that net yields have increased slightly in the current quarter and now stand at just under seven per cent.
maisfield said: “a key ingredient for 2014 will be the introduction of real estate rules and regulations and free zones attracting various businesses into abu dhabi through abu dhabi global markets masdar twofour54 kizad and skypark.”