Vacancy rate in the office market has increased by 32% and is expected to rise further
Property consultancy Jones Lang LaSalle (JLL) has said significant increases in supply, the relatively weak demand and tight economic conditions will cause rents in Abu Dhabi to ‘correct’ from the “unsustainable highs of the boom years.”
Abu Dhabi’s residential stock saw an additional 2,900 new units being added over the second quarter, while the office sector is entering a period of oversupply, JLL said.
The vacancy rate in the office market has increased to around 32% and is expected to increase further as more new supply comes on-stream, the report said.
The performance of the retail market, which remained steady during the quarter, is expected to improve as demand for retail in the emirate grows due to the spending power of the population and additionalgrowth from increasing tourism.
The retail sector could see an estimated 300,000 m2 of Gross Leasable Area (GLA) being delivered to the market by the end of 2012.
“Abu Dhabi’s real estate sector is becoming more competitive and moving further in favour of tenants and occupiers, as a large number of high quality projects are delivered across all sectors,” JLL said in its quarterly report.