By Daniel Shane
RICS survey shows that demand continues to rise among both occupiers and investors
Sentiment in the UAE’s commercial property sector is at its strongest since immediately prior to the 2008 crash, new research showed, with demand climbing among both occupiers and investors.
The Royal Institute of Chartered Surveyors’ (RICS) Global Commercial Survey Q3 rated the Gulf state’s commercial real estate market as the best performing during the quarter, alongside that of Japan.
RICS’ Occupier Sentiment Index, which measures demand among occupiers, continued to climb during the three-month period, which the organisation interpreted as an indicator that rents will continue to climb into Q4. However, the report said that oversupply was pervasive in some areas, most notably Abu Dhabi’s office sector.
RICS’ Investment Sentiment Index, which measures appetite among commercial property investors, reached its highest point since 2009 in Q3 based on rising expectations of capital value increases, particularly in the retail sector. It noted that a booming tourism and hospitality market was likely to inflate the index further into Q4.
“The UAE market has been supported by the geopolitical situation through its position as a regional safe haven and a gradual economic recovery on the back of a pick-up in bank lending,” the report stated. “Significantly, the supply of distressed assets has dropped for the second successive quarter and there is increasing evidence of developers initiating new projects.”
The RICS research is compiled based on responses to a survey by chartered surveyors.
Property prices in the UAE collapsed by up to 60 percent in 2008-2009 due to the bursting of Dubai’s real estate bubble, but have slowly been rising again since last year.
According to a separate report by consultant Jones Lang LaSalle, quality office rents rose 3 percent year-on-year during Q3.