By Andy Sambidge
New report by Cushman & Wakefield also says prime rents in UAE market beginning to stabilise
Real estate markets in the Middle East saw a 15 percent rise in investments from non-domestic buyers in the first quarter of 2011, compared to Q4 2010.
According to Cushman & Wakefield's latest EMEA Property Investment Report, prime rents across all sectors in the UAE are beginning to stabilise following months of declines.
Although investors remained focused on the core markets of the UK, France and German, the Middle East is re-emerging as an investment option, the study added.
"Prime yields in the UAE are beginning to stabilise, reflecting investors' long term confidence in the country and its leading regional position in terms of transparency, availability of quality assets and the advanced logistics and infrastructure network," said Cushman & Wakefield.
It added that occupational rental markets in free zones and prime office locations have also shown signs of stabilisation while freezone licensing enquiries have increased significantly during the first half of 2011.
Mike Atwell, head of Middle East operations for Cushman & Wakefield, said: "The recent events in the Middle East have not deterred international investors from the region.
"We still see an appetite for investment in our core markets of Saudi Arabia, the UAE and Qatar. However demand for product is restricted to prime buildings in established locations, leased to strong covenant tenants for lease lengths in excess of five years."
Earlier this month, Deutsche Bank said Dubai property prices continued to fall and political instability in the Middle East failed to give the market an expected boost.
Home values declined 1.2 percent in May compared with the previous month and rents fell by one percent, analysts Nabil Ahmed and Athmane Benzerroug wrote in a note to investors. Apartment prices slid 1.3 percent in May, while villas declined one percent.
Property prices in Dubai have dropped 64 percent from their peak in mid-2008, while rents have fallen 55 percent, according to Deutsche Bank.