By Claire Ferris-Lay
Companies in the emirate are waiting for new supply to come on stream, says property consultant
Abu Dhabi-based companies are waiting for new office developments to come on stream at the end of 2011 when prices are expected to decline further, according to a report released on Thursday.
Lack of grade A commercial space in the emirate is limiting the gap between rentals of the best space and the secondary market, Cushman & Wakefield said in its guide to the Abu Dhabi office market.
“We believe that many occupiers remain reluctant at this point to commit to a major relocation until the first phases of the major office developments come to the market,” David Quinn, head of agency at Cushman & Wakefield Middle East said in a statement.
“[We] expect this to change appreciably with the impact of the new developments coming on stream later in 2011 and early 2012,” said the report.
Increased competition between developers and landlords has resulted in a further decline of rents since the start of the year, said the report.
Prime rents vary from AED 2,000 to 2,300 per sq m pa in the most desirable buildings, said Cushman & Wakefield.
The release of several delayed properties onto the Abu Dhabi residential market during the second quarter is set to “result in a spell of increased rental and sales activity”, real estate agency Cluttons said last week.
Cluttons said that the long-awaited delivery of projects like Sun and Sky Towers, and Marina Square’s RAK Tower – both on Reem Island – would end two years of stalemate in the UAE capital.