{"id":53639,"date":"2017-05-03T23:37:05","date_gmt":"2017-05-03T16:37:05","guid":{"rendered":"http:\/\/www.siamlandbank.com\/propertynews\/?p=53639"},"modified":"2017-05-03T21:59:49","modified_gmt":"2017-05-03T14:59:49","slug":"weak-demand-and-increasing-supply-hurt-prospects-for-abu-dhabi-property","status":"publish","type":"post","link":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/weak-demand-and-increasing-supply-hurt-prospects-for-abu-dhabi-property\/","title":{"rendered":"Weak demand and increasing supply hurt prospects for Abu Dhabi property"},"content":{"rendered":"


\nProperty prices are expected to remain in decline in Abu Dhabi throughout 2017, as the weak economic outlook and more project completions impact on all sectors of the market, according to CBRE.The property consultancy’s Q1 Abu Dhabi Market View report states that residential rents have dropped by 8 per cent year-on-year, while commercial office rents are 5 per cent lower over the same period. It also quoted STR Global figures showing that revenues per available room (RevPar) also dropped by 8.5 per cent year-on-year to the end of March.
\nIt said that the office market “continues to suffer from weakening demand fundamentals due to soft economic conditions and ongoing government cost-cutting measures, which have negatively impacted demand in the commercial sector”.Added to this, inventory levels are rising as new office projects are completed and buildings handed over, especially on Reem Island. Matthew Green, CBRE’s UAE head of research and consultancy, said that he expects much of the 1.4 million square metres of office space due to be handed over by the end of 2019 to be delayed due to market conditions.
\n“We can learn from history that developments will be pushed out further and further, but it’s still a significant amount of supply,” he said.He expects the secondary market to be worst-affected by new supply, as people trade up to improved buildings, but argued that landlords of premium, Grade A space are also facing challenges.”Unfortunately, in a market like Abu Dhabi, some of the biggest occupiers willing to pay the higher rents have been government-related entities. We’ve had examples where some have either had to move out entirely or downsize significantly.”
\nThe residential market is showing greater signs of resilience, he said, if only because there is not much new supply being built. Smaller, mid-market apartments are holding their rental value, Mr Green said, as people in larger units who have had housing allowances cut, seek more affordable space.However, he said that hospitality “is one of the most challenging markets in Abu Dhabi at the moment”.
\nAlthough occupancy figures have held up reasonably well, standing at 75 per cent at the end of March, compared with 78 per cent a year earlier, the lack of demand and increasing supply has forced operators to drop prices. Average daily rates (ADR) fell 4.4 per cent in the first three months of the year, while revenue per available room is 8.5 per cent lower year-on-year at Dh396 per room, per night.
\n“It’s a very difficult market,” Mr Green said. “Corporates are not spending as much, governments are not spending so there is not as much work externally for consultants and business travellers. We’ve seen all of this, combined with the fact that Abu Dhabi is still emerging as a leisure destination.”He added that the strength of the US dollar (to which the dirham is pegged) has also made tourists more cost-conscious.
\n“People can’t afford to spend the way they were before.”Abu Dhabi’s Tourism & Culture Authority (TCA) said on Wednesday that it will embark this month on a promotional tour to four Chinese cities in a bid to drive tourism.TCA said that China is now the biggest source market for international visitors, overtaking India. Almost 100,000 Chinese visitors stayed in the city between January and March this year, it said.
\nIn September last year, it was announced that the UAE would grant Chinese tourists a visa on arrival into the UAE.Mubarak Al Nuaimi, TCA Abu Dhabi’s director of promotions & overseas offices, said: “China has been identified as one of our priority markets. Each year we are seeing impressive growth in the number of hotel guest arrivals and the first quarter of this year has been excellent, with close to 50 per cent growth over the same period in 2016.”
\nmfahy@thenational.ae
\n
\nSource : thenational.ae
\nRead more…Weak demand and increasing supply hurt prospects for Abu Dhabi property<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Property prices are expected to remain in decline in Abu Dhabi throughout 2017, as the...<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"false","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"spay_email":"","footnotes":"","jetpack_publicize_message":"","jetpack_is_tweetstorm":false,"jetpack_publicize_feature_enabled":true},"categories":[1],"tags":[],"class_list":["post-53639","post","type-post","status-publish","format-standard","hentry","category-property-news"],"jetpack_featured_media_url":"","jetpack_publicize_connections":[],"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p75ss1-dX9","jetpack-related-posts":[{"id":51380,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/weak-jobs-market-continues-to-affect-demand-for-luxury-housing-in-abu-dhabi\/","url_meta":{"origin":53639,"position":0},"title":"Weak jobs market continues to affect demand for luxury housing in Abu Dhabi","date":"April 9, 2017","format":false,"excerpt":"\r Continued weakness in the Abu Dhabi economy is forcing more property investors to become \"accidental landlords\", as they are unable to sell units that are nearing completion at a profit, according to a new report by Cluttons.These investors' willingness to offer more flexible terms to potential tenants to secure\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":51392,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/soft-economic-sentiment-a-drag-on-abu-dhabi-property-sales\/","url_meta":{"origin":53639,"position":1},"title":"Soft economic sentiment a drag on Abu Dhabi property sales","date":"April 9, 2017","format":false,"excerpt":"\r Continued weakness in the Abu Dhabi economy is forcing more property investors to become \"accidental landlords\", as they are unable to sell units that are nearing completion at a profit, according to a new report by Cluttons. These investors' willingness to offer more flexible terms to potential tenants to\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":44235,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/property-broker-asteco-expects-abu-dhabi-rents-to-fall\/","url_meta":{"origin":53639,"position":2},"title":"Property broker Asteco expects Abu Dhabi rents to fall","date":"February 15, 2017","format":false,"excerpt":"\r Asteco has become the latest property broker to forecast rent declines in Abu Dhabi this year as 4,000 new homes are expected to come on to the market. According to the property broker's data, average rents for apartments in Abu Dhabi fell by 7 per cent in 2016 and\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":17348,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/dubai-and-abu-dhabi-rents-still-rising-despite-fall-in-demand-report-says\/","url_meta":{"origin":53639,"position":3},"title":"Dubai and Abu Dhabi rents still rising despite fall in demand, report says","date":"June 22, 2016","format":false,"excerpt":"\r Asking rents in Abu Dhabi and Dubai are rising despite a fall in demand caused by falls in the global oil price a new report claims.According to the online property listings portal bayut.com, which analyses property listings, asking rents in Dubai rose 1.57 per cent in May compared with\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":10510,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/demand-drops-for-abu-dhabi-high-end-rentals-as-budgets-fall\/","url_meta":{"origin":53639,"position":4},"title":"Demand drops for Abu Dhabi high-end rentals as budgets fall","date":"April 11, 2016","format":false,"excerpt":"\r \r Abu Dhabi's rental market is showing signs of fragmentation as softer demand for higher-priced areas contrasts with a shortage of more affordable homes.According to Cluttons, cuts to housing allowances offered by companies in the emirate means there is a much smaller pool of potential tenants for high-end properties,\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":34618,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/abu-dhabi-residential-rents-feel-the-pinch\/","url_meta":{"origin":53639,"position":5},"title":"Abu Dhabi residential rents feel the pinch","date":"November 16, 2016","format":false,"excerpt":"\r Office rents in Abu Dhabi have fallen to their lowest point in more than eight years as low global oil prices continue to slow the capital's economy. According to property broker Asteco, average office rents in prime office buildings in the capital slumped by 4 per cent in the\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/posts\/53639"}],"collection":[{"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/comments?post=53639"}],"version-history":[{"count":0,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/posts\/53639\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/media?parent=53639"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/categories?post=53639"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/tags?post=53639"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}