While the real estate sector in the UAE continues to outperform many other countries in the MENA region signs are begin ning to show that the pace of growth in rents and value may stabilize going forward. This is both partially because of government initiatives which are being introduced to cool down property prices and a potential mismatch of supply and demand in the market .
With regard to the particular sub-sector it looks as though retail and industrial sub-sectors will continue to perform well while the office sub-sector will continue to suffer from a lingering supply overhang dating back to the 2008 financial crisis. As a result vacancy rates remain stubbornly high at around 40% in Abu Dhabi, a situation which continues to be engendered by a heavy flow of new developments.
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Similar to other countries, the real estate sector in UAE is highly dependent on economic conditions in the country. It is fair to say the current economic situation in the Emirates is on the whole very positive. If we look at GDP, UAE has seen 4.8% real GDP growth in 2013, 4.4% growth in 2014 with a projected 4.2% for 2015. Going forward BMI feels that GDP will remain in the range between 4% and 5% over the remainder of forecast period which is very positive. As well as this, other factors such as the purchasing manager index remains are close to a record high at the moment . This barometer which not only shows the pace of new orders are still rising in July, but companies were rushing to ramp up production by setting in motion plans to recruit new staff rapidly. This auger well for all aspects of commercial real estate in particular the office segment which has been struggling as of late.
The real gem of the commercial real estate sector remains the real estate sector. The recent uptick in economic performance has trickled down to consumers in the form of disposable income which is acting as a catalyst for the sector as a while. Going forward projects such as the...
The United Arab Emirates Real Estate Report features Business Monitor International (BMI)'s market assessment and independent forecasts of major construction projects in the residential and commercial markets, plus rental prices and yields in major cities. The report critically analyses the prospects for real estate within the broader economic and financial context - both domestic and global - via our econometrically-modelled and clearly explained banking and economic forecasts and follows this through to evaluate the implications for REITs.
BMI's United Arab Emirates Real Estate Report provides industry professionals and strategists, sector analysts, business investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the real estate industry in United Arab Emirates.
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"United Arab Emirates Real Estate Report Q1 2015" is now available at Fast Market Research
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Contact Name: Bill Thompson
Contact Email: press@fastmr.com
Contact Phone: 1-413-485-7001