Dubai Real Estate : Office space market supply still high

Steady decline in price, demand for office space rentals has finally bottomed ou.

In late 2010, Landmark Advisory predicted that office supply in the UAE would”virtually double” by 2014. Despite all odds, with the global financial crisis topping the list, this prediction has come true.

There is currently a gross oversupply of office in the capital and Dubai. Rents have continued to fall in the past few years, with lot of them bottoming out finally in the last quarter of 2012. The steady decline of rents in commercial properties since 2008 seems to have stopped and slowed, and some areas like Dubai International Financial Center, even showed a modest 2% Increase in rental rates.

According to the Dubai Real Estate Market Overview, 1.4 million square meters have been added to Dubai’s office space last year. This is an addition to the already existing 6.1 million square meters of office space.

Landlords in the commercial sector have been offering competitive rates and incentives like rent-free months and customized office space fit-outs to attract. Some landlords have even split up their office units to maximize their potential. As a result, businesses are experiencing savings as much as 40% of their fixed costs that would have previously gone towards rent.

Quite surprisingly though, commercial space in malls both in the capital and in Dubai is high demand, and malls are enjoying full occupancy. In contrast, new office space in the capital has less vacancy than its counterpart in Dubai.

The good news is that 2013 will be the year that landlords will rejoice. Rental rates are either bottoming out or showing increase and the demand and interest in office spaces in picking up again, albeit a little slowly. Offices spaces on Shaikh Zayed Road, Jumeirah lakes Towers, Business Bay and Al Barsha look particularly promising.

Dubai Real Estate Tips:

·       Businesses get savings because of fall in demand and prices

·       Some areas in Dubai have seen modest increase in rental rates

·       Commercial space in malls in Dubai, Abu Dhabi in high demand.

Dubai Real estate news : Tenant relocation is a matter of choice or necessity?

Tenant relocation is a matter of choice or necessity?

Many residents are priced out of prime areas due to growing demand and ever-rising rental rates.

As commodities in so-called secondary locations, namely those along the Sheikh Mohammed Bin Zayed road(E311) corridor,continue to evolve, residents are taking advantage of lower rent rates and/or the opportunity to many tenants being priced out of prime developments due to growing demand and ever – rising rental rates.

Although existing tenants are protected by rental cap, which only allows an increase if rents fall below the area range stipulated by RERA, not everyone is aware of this, with some people forced out of their homes because landlords claim to be moving in themselves, or selling the property when, in fact, they’re simply looking for an opportunity to get higher rents from new tenants.

Again, many residents are oblivious to the fact that the owner has to give 12 months notice before they can evict the tenant, or simply decide to move out in order to avoid any hassle with the landlord.

Based on the RERA rental index,the prices for one-bedroom apartments in 

Dubai Marina/ Jumeirah Beach Residence range from Dh50,000 up to Dh90,000. 

According to listings on one of the most popular property search engines in the UAE, there are over 1,300 units advertised above the upper limit of that rang. Despite the fact that this number includes duplicate advertisements and furnished units that achieve premium, the total figure and the fact that new tenants are willing or have no choice but to pay the price or move to less desirable areas is alarming.

Even though rising demand is a result of the growing economy and consumer confidence, which is a positive indicator, if rates continue to grow at these levels, it won’t be long befor people have no choice but to leave Dubai for the more affordable neighboring emirate of Sharjah, at least for the short term.

In the long run, however, there is still a significant amount of

supply in the pipeline and this, coupled with new project launches, is likely to level out the supply-demand balance and keep rent hikes at bay.

Property Tips

·       Some tenants are forced out of their homes not aware of the rental cap.

·       Some are oblivious to the fact that landlords must give 12 months notice.

·       People might leave Dubai for cheaper Sharjah if rates continue to increase.

Dubai Real Estate: Buyer/renter beware remains relevant today

Buyer/renter beware remains relevant today

Preparation, research and communication will help you find the perfect property.

As real estate agents, we often find our clients making the same mistakes when looking for their dream home or property. Our responsibility is to inform and guide them to make wise choices so they are happy especially after their purchase. Indeed, it makes sense to have return customers and referrals. As such,let us identify the common errors we usually encounter as you can go about your search with a “buyer beware” attitude.

From the outset, you need to be clear if you plan to purchase the property for a home or investment as the two objectives may lead us to choose very different options for you. Once you are clear about the reason, we then ask you to identify your budget, whether buying or renting. This will save you from wasting time and getting emotionally attached to properties you means, so you avoid irrational decisions by taking a measured approach. In the case of mortgage clients, they should arrange for the pre-approval of funds, and cash investors should identify their allocation of funds. You can end up wasting a lot of time if you have arranged pre-approved funds. Renters need to be realistic about their budget and identify locations as per their style needs.

Sometimes buyers are not aware of all relevant costs associated with purchasing property. It helps to do some research first and, as an agent. We should provide a realistic picture of costs-from maintenance charges, agency/transfer fees and costs associated with taking up a mortgage. The market also calls for a cautious and diligent approach to purchasing off-plan so it is better to take legal advice especially regarding this.

Another common error is not investigating the quality of construction and maintenance record. Check the track record of developers and /or master developers regarding the maintenance of the property, and examine the finishing. Understanding the owners association’s role and interacting with the developer also helps.

     With families and couples, there is usually one person thats more rational than other. However, both need to be on the same page and have a unity of purpose. We have seen couples fighting once one becomes fixated on the property and other is not. 

We can’t be marriage counselors, but we do know those who are on the same page tend to walk away happier from their purchase. So, as with many aspects of life, preparation, research and communication will help you find the perfect property.

Dubai Real Estate Tips

·       Mortgage clients should see to it that they already have pre-approved funds.

·       Be cautious and always take legal advice when purchasing off-plan property.

·       Renters need to identify locations as per their lifestyles needs and budget.

GMAD set to boost Al Maryah Island

GMAD set to boost Al Maryah Island

Will  capitalize on UAE’s location between the Far Eastern and European markets.

Primed as the new central business district of the capital, Al Maryah Island in Abu Dhabi has received a shot in the arm with the announcement of new financial free zone. The hub called the Global Marketplace Abu Dhabi(GMAD) will be located at Sowwah Square on the island.

Free zone status will allow the companies operating from there to establish operations in the country without the need for a local partner and be able to repatriate profits and capital abroad. Modelled along the lines of DIFC in Dubai, the free zone will have its own registrar of companies, new regular called the Financial Services Regulations Bureau, and its own system.

The courts will have a  chief justice, as well as court for first instance and court of appeals. Institutions operating in the zones  will include various type of banks, trading companies, foreign exchange and commodity trading companies, prime brokerages , pension and investment funds, Islamic financial firms, companies handling stock trading and financial consultancies. GMAD intends to capitalize on the UAE’s location midway between the leading Far Eastern and European markets which enables the UAE financial markets to operate at times when other international markets may be closed for trading.

The headquarters of the Abu Dhabi Security Exchange is already located at Sawwah Square and the adjoining district is already witnessing frenetic retail and commercial activities. The 51,000 – square-meter. The Galleria Mall is set to be opened later this year. Phase 1 development in the area consist of a couple of luxury hotels, health clinic and some commercial towers. Majority of the offices in the towers are leased to foreign companies and the occupancy rates are expected to jump severalfold after the establishment of the financial economic zone

Global Marketplace Abu Dhabi(GMAD

Sharjah residential rental market heats up

Sharjah residential rental market heats up

Demand is increasing,occupancy levels are high but the available new stock is limited.

Sharjah landlords are once again benefiting from the rising residential rents in Dubai which has led to the influx of people being priced out of the rental market in that emirate. Demand is increasing and occupancy levels are high.

The recent launch in the market of the Arenco golden sands Tower in Al Nahda  proves that the residential  market is once again heating up and rents are moving rapidly upwards

Asking rent of DH 41,000 for a one bedroom flat with split A/C have mot been seen in Sharjah for several years. This will come as a shock to tenants looking to move.Add to this fact that the owners are only prepared to accept a one-cheque annual payment and want 20percent of the annual rent as security deposit.This is a different marketing strategy altogether. Of course, this is only one tower and whilst this does not necessarily set the market rate, it represents a significant shift in the market.

The tower is new and an appealing prospect for tenants, the location is convenient and is offers a high standard of finishing and facilities. Compare this is to current average rents for a medium quality one-bedroom flat in that location which fall around Dh30,000 to Dh32,000 per year.

Add to this increased demand is the fact that very few new buildings are currently ready for launch in the Sharjah market as new building construction projects were stalled during the economic downturn.
Private landlords either did not start projects or put things on hold so the available new stock is limited.

Real estate in sharjah for rent

The Sharjah municipality still offers tenants a protection period for three years from the start of a new lease, but with rates then moving to market rate on renewal on the fourth year tenants could very well get a shock when they are told what the new rent might be.

This is probably going to lead to an increase in disputes between tenants and landlords via the rental committee hearings within the municipality . This lengthy process could become an even more laborious process for both parties  if the number of cases increases.

Unfortunately there is no  relief in sight yet for tenants who will be paying more for their homes very shortly.

Real estate in sharjah for rent