Elaine Jones, CEO, Asteco Property Management
Movement in the Northern Emirates’ property market over Q2 2011 was led by Sharjah apartment rentals, with some areas increasing 2% over the previous quarter, according to Asteco Property Management’s latest quarterly report.
“The Northern Emirates continues to see rental rates at constant levels from the previous quarter, with pockets of decreases for units with high supply levels,” said Elaine Jones, CEO, Asteco Property Management.
“While price stability and decreases were seen across the Northern Emirates as a whole, studios in Sharjah’s Al Khan and Corniche areas climbed by 2% in Q2, with current rental rates ranging from AED20,000 and AED25,000 per annum. This is partly attributed to these areas being so close to the sea and Dubai” added Jones.
High vacancy rates have continued in Sharjah, which has led to attractive rental rates and intense competition between landlords.
Another trend the Asteco report highlighted was the continuing shift to Dubai, with many tenants prepared to pay the extra premium to upgrade and move to properties closer to work and school locations.
Sharjah’s villa market continued to fall, with three and five-bedroom villas in the Al Khan, Shargan and Al Quz areas particularly affected. The report attributed this in part to the lower relative maintenance costs of apartments versus villas.
Average three-bedroom villa rental rates in Al Khan, Shargan and Al Quz were AED77,500, AED75,000 and 81,000 per annum respectively, with Al Khan prices down 3% and Al Quz down 2% over the quarter.
Sharjah’s office market saw prices continuing to increase, with Al Wahdah area seeing a 5% price increase. Average rental rates ranged from AED485 to AED645 per square metre, with demand increasing over the last six months due to improved access to commercial buildings.
Retail units continued to stabilise, with rents ranging from AED755 to AED1,075 per square metre on the Corniche, and AED810 to AED1,075 per square metre on the Al Taawun Road.
Among the smaller emirates, Ajman apartment leasing prices fell again, driven by low demand and strong supply, with average one-bedroom rates on Sheikh Hamid Road and Corniche Road each down 4%. Movement is also being seen with some developers of ongoing projects approaching those whose developments have stalled and asking investors to transfer.
Fujairah, Umm Al Quwain and Ras Al Kaimah all remained stable over the last three months, with no change in apartment rental prices in most areas.
In Fujairah, the report pointed to a potential change in the near future, as prospective tenants are awaiting the release of new rental rates as new buildings prepare to be connected to utilities.
Umm Al Quwain saw no change over the quarter, amid low levels of new development and little demand.
Ras Al Kaimah’s apartment leasing market stabilised over the quarter, though fresh demand for residential leasing is anticipated as the new Maritime City free zone has recently launched. Up to 5,000 new jobs are anticipated over the next 18-24 months, which should boost demand for apartments.