Abu Dhabi property developers follow Dubai project slowdowns
There is a slowdown in completion rate in Abu Dhabi compared to 2015 due to the current market conditions. (Shutterstock)
Abu Dhabi developers seem to be taking pointer or two from their Dubai counterparts’ playbook — slow down the pace of project completions.
“There is a slowdown in completion rate compared to 2015 due to the current market conditions,” said Robin Teh, UAE Country Manager and Director - Valuations & Advisory UAE, Chestertons MENA. “Due to the continuing instability in the job market, demand has weakened in the last few months.”
According to the consultancy, around 1,000 units were delivered in Abu Dhabi during the third quarter, and a further 3,000 units are expected to enter the market before the year end. (By the end of the decade, some of the major developments due for completion include The Square – Saadiyat Island, New York University Villas, Mayan Yas Island and The Island Abu Dhabi.”
But recent declines in rentals is ensuring that Abu Dhabi still “remains an attractive destination for investors, with gross rental yields reaching as high as 8.5 per cent in the apartment sector and 7 per cent for villas.”
“The capital’s position as a safe haven for investors has been consistent in recent years, offering returns of 5.5 per cent and above,” said Teh. “This has remained true throughout 2016 with overall gross rental yields at a constant level to date.
“Al Ghadeer and Al Reef Downtown remain the most attractive locations for investors with yields between 8-9 per cent. Villas in Al Reef and Al Raha Gardens provide the highest yields between 6-7 per cent.”
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