Tuesday, July 29, 2008

Abu Dhabi house rents soar 49pc in one yearBy Haseeb Haider

Abu Dhabi house rents soar 49pc in one yearBy Haseeb Haider
29 July 2008 KHALEEJ TIMES

ABU DHABI — Rents of quality apartments in Abu Dhabi have gone up by 49 per cent over the past one year as the demand for reasonably priced apartments outstripped supply in a city that is witnessing hyper business activity, says a report.

"The most notable movement comes in the two-bedroom unit category with 66 per cent increase in rents over the last year," says the report compiled by Asteco, a property management company that is analysing the current demand and supply situation.

The report has, however, painted a rosy picture for the future, as almost 70 per cent of the new projects being built in the Musaffah area have been earmarked as residential because the government is well aware of the shortage in accommodation.

The Asteco report for the second quarter of 2008 estimates that 60 per cent of the new accommodations would be two-bedroom apartments meant for couples and families. Nearly 25 per cent of the new accommodations will be one-bedroom units while the remaining will be three- and four-bedroom units.

Areas such as Muroor, Tourist Club Area (TCA) and Salam Street are witnessing the most activity. Khalidiyah, which showed the lowest growth due to low tenant movement, is still the most-sought-after location.

Khalidiyah attracts a mix of nationalities, specially emiratis and western expatriates, due to its proximity to Marina Mall and a number of international schools in the area.

Hamdan Street continues to command high rents of nearly Dh125,000 for one-bedroom apartments. Units in this area are of poor quality and landlords are taking advantage of the shortage of supply and are charging above average prices

Villas in Khalidiyah, Bateen and Manaser command some of the highest rents in Abu Dhabi starting at Dh150,000 for a three-bedroom property. Nearly 80 per cent of the villas in these areas are high quality and tend to be occupied by a mix of high-income individuals.

Villas in Al Falah and Airport Road areas are of slightly lower quality, yet the rents are high. In addition, many villas are split into separate units to cater to the growing 'bachelor' clientele.

According to Asteco report, there is no shortage of villas in Abu Dhabi, yet rents are high.

"This problem is likely to be eased when the more affordable villa projects in Khalifa City, Mohammed bin Zayed City, Al Raha, Sas Al Nakheel and Seashore come on line," says the report.

Commenting on the situation, Rebekah Savage, of Foundation Property Management Co, which manages a large number of residential buildings, told Khaleej Times that Abu Dhabi Commercial Properties (ADCP) recently estimated that there are 250 buildings in and around Abu Dhabi city centre that would be demolished and 750 buildings would be built in and around Abu Dhabi and the garden city of Al Ain.

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