The office rents in Abu Dhabi are likely to drop further over the next six months, with increase in numbers of fresh commercial developments, a new report said.
The demand for offices in Abu Dhabi is likely to improve over the next one year, with private sectors witnessing improved conditions due to government investments. However, supply will continue to surpass demand, the Q3 report by Abu Dhabi Office and Residential Marketview said.
However, despite the continued drop in rental rates, the rate of decline is narrowing down and is now at its lowest level since the start of property slump, the report pointed out.
Average rents in the capital dropped two percent in third quarter this year, in comparison to previous quarter, while the prime office rents in Abu Dhabi were flat at Dh.1600 to Dh.1900 per square metre.
As for the residential market, average rentals have dropped 6 percent, in comparison to the third quarter. Further, some properties are seeing static rents, while others have a decline of 3 to 9 percent, the report showed.
As of now, in the development cycle, there is no immediate end to this trend, with better quality inventory entering the market, thereby adding pressure to inferior units.