Growing interest from global investors has sparked a rebound of the UAE commercial property market.
The Global Commercial Property Survey by the Royal Institution of Chartered Surveyors (RICS), shows a sharp increase in global investor confidence in the UAE property market. The UAE leads the RICS Occupier Sentiment Index, while it took the second place in the RICS Investment Sentiment Index. These indices track how investor sentiments change over a three month period in various countries.
The report suggests, “further improvements in sentiment in both the occupier and investment segments of UAE real estate market show that the tone in the property industry is continuing to gain ground, reversing the negative pattern that characterized the market from the back end of 2009 through till the middle of last year.”
The real estate markets in the UAE, Japan, the U.S. and across Asia, have continued towards a steady recovery adding to a general notion of investor confidence. The UAE in particular, is seeing the results of the warming real estate market.
Other industry reports forecast that prime office rents in UAE were expected to rise for the first time since 2008. Investor confidence in the UAE market has continued to swell on the back of improvements in the ease of doing business and the level of optimism surrounding the business outlook.
A second quarter report by Department of Economic Development (DED) highlights that rents in prime office buildings in some areas have soared by 8 percent — compared to the first quarter of 2013. The global financial crisis hit the UAE real estate sector hard, with prices declining by over 50 percent. Occupiers were keen to relocate to new office areas, such as Business Bay, Downtown, Jumeirah Lakes Towers or Jebel Ali. Property prices in older buildings are expected to fall because of activity in quality, newer projects.