By Staff writer
Asteco says it expects vacancies to increase and rents to fall in Sharjah over the coming months
Sharjah is likely to see a reduction in the number of people relocating from neighbouring Dubai this year due to improved rental opportunities, according to Asteco.
The real estate consultancy said in a new report that it expects increased vacancies and a decline in rental rates in the emirate.
The scenario of tenant migration away from Dubai peaked in Q1 2014 and with the current slowdown in Dubai, the brakes have been put on relocation, the report said.
Asteco said the outlook for the Northern Emirates’ real estate market in 2015 is set to follow the general UAE trend. A "muted" year is on the cards in terms of market movement following a modest 10 percent average rental increase in Sharjah, Ajman, Ras Al Khaimah in 2014.
“The Northern Emirates’ real estate market, and particularly Sharjah and Ajman, has traditionally been characterised by strong interdependence with Dubai due to overflow demand. That scenario peaked most recently in Q1 2014 and with the current slowdown in Dubai, which has effectively put the brakes on tenant migration, a potential correction in rental rates for both Sharjah and Ajman is anticipated in 2015,” said John Stevens, managing director, Asteco.
Both Fujairah and Umm Al Quwain, however, are unlikely to see much change for the year ahead, as they are less inter-related with Dubai, he said.
Strong levels of growth and high occupancy levels throughout the Northern Emirates were recorded in H1 2014, but the second half of the year saw downward pressure on leasing rates, which were already around 50 percent cheaper than similar properties in Dubai, and even 60 percent more affordable in Ajman.
The popularity of a number of high profile sea and golf course-fronting master-planned communities in Ras Al Khaimah, including Al Hamra Village, Mina Al Arab and Marjan Island, is also expected to hold firm this year according to Asteco, with the report forecasting stable levels of demand from both sales and leasing as these communities become more established, resulting in marginal rate increases.
“Ras Al Khaimah had a relatively good year in 2014, as a good value-for-money option with a selection of quality properties available at reasonable prices, and regulatory transparency on property ownership promoting strong demand; whereas Sharjah’s sales potential is still stymied to a certain degree by the absence of clear ownership regulations,” said Stevens.
Further stagnation in the office sector is similarly forecast for Sharjah in 2015 with rental rates expected to remain flat.For all the latest real estate news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.