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New real estate law ‘vital for Abu Dhabi’s growth’

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Abu Dhabi government’s new real estate law should provide a stronger foundation for inward investment which in the long term should benefit the choice and competitiveness in the occupational market, according to an industry expert.

However, in the short term, regional unrest and global economic headwinds have reduced interest and take-up from international companies looking to locate in Abu Dhabi, stated Knight Frank, the leading independent global property consultancy.

The new law, which has been through more than seven years of consultation, review and drafting, is a positive step towards attracting increased real estate investment in Abu Dhabi., it added.

Part One of the law defines several important terms including the real estate register, the interim real estate register, the real estate development register, real estate development projects, escrow accounts, off-plan sales, service charges and community charges, it stated.

On the office sector scenario in Abu Dhabi, Knight Frank said in the last half of 2015, with the oil price affecting market sentiment, it had witnessed a slowdown in the number of office enquiries.

“Engineering and construction continued to be the most active sectors in the number of enquiries, which reflects the recent growth in the number of infrastructure and real estate projects under progress,” stated the expert.

In the second half of 2015, Knight Frank report said, the grade A and prime supply remain subdued with the possibility of some new developments under construction being further delayed in completion.

Prime office rents remained steady at Dh1,900 ($517) per sq m, whilst rental values for Grade A shell-and-core office space stood at Dh1,300 ($354) per sq m.

Buildings which do not meet occupier’s exact requirements in terms of specification, parking, access and egress will face continued voids as occupiers that do relocate will be reviewing the market more carefully.

Matthew Dadd, partner at Knight Frank, said: “With economic growth expected to slow and UAE inflation expected to fall from four per cent in 2015 to 3.5 per cent this year, the outlook for the UAE still remains positive. However, demand from occupiers is expected to remain low with take up for smaller requirements.”

“There is however, limited supply entering the market, which will mean landlords will not witness a jump in availability across the market,” he added.-TradeArabia News Service

Source: TRADE ARABIA

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