Although market conditions in Abu Dhabi remain relatively unchanged, the second quarter witnessed a major announcement by Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces Sheikh Mohamed bin Zayed Al Nahyan, introducing an economic stimulus package for Abu Dhabi to drive economic growth, said leading real estate expert JLL.
The stimulus package introduced in early June this year will drive initiatives that directly affect the real estate sector by reducing costs for developers, promoting partnerships between public and private sectors, and also providing dual licenses for companies located in free zones to bid for, and undertake government tenders outside the free zone, stated JLL in its latest Abu Dhabi Q2 real estate report.
“The new government economic stimulus package has positive implications for the UAE capital with new initiatives directly impacting the real estate market and as with previous government stimuli should lead to an upswing in investment,” remarked Peter Stebbings, the national director, and head of Abu Dhabi, JLL.
Stebbings said there has been an increased focus on promoting and implementing public-private partnerships across the region and within the UAE in particular.
"With the stimulus package being introduced in Abu Dhabi, real estate developers will be able to reduce costs, paving the way for positive sentiment across the market," he noted.
According to JLL, the residential rents and sales prices largely remained unchanged in the second quarter. However with the UAE’s decision to allow 10-year visas for expats and 100 per cent foreign ownership in companies outside of free zones will boost sentiment in the residential market, providing expats with more security over their rights to remain in the UAE.
On the office sector, JLL said the rents have slightly fallen during the quarter as consolidations continue to take place and other companies choose to downsize.
Employment levels in Abu Dhabi continue to be affected, specifically in government agencies and financial service entities, placing downward pressure on rental rates, said the top property expert in the report.
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On the retail scenario, JLL said the introduction of VAT earlier this year has prompted retailers across the UAE to shift their focus to ways in which they can provide greater value to shoppers who have become more price conscious.
With regard to the hospitality market, the property expert said there had been a 2 per cent increase in occupancy levels in the UAE capital's hotel rooms and a 7 per cent drop in ADRs (average daily rate) compared to the same period last year.
Consequently, RevPar ( revenue per available room) declined by 4 per cent in year to May over the same period last year, it added.
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