The Dubai office space rental market will maintain its prosperity in the second quarter of 2024

The real estate market report for the second quarter of 2024, issued by Asteco Real Estate Services, stated that the rental market for office space in Dubai continued to grow, especially in Class A, driven by strong demand and limited supply. The upward pressure on rents is expected to continue until new units enter the market or business conditions change.

The report revealed that the retail market in Dubai continues to see strong growth, driven by the continuous launch of projects that will improve retail transactions on the map. While the second quarter of 2024 recorded a consistent growth of 2% in average sales prices, several areas, including Jumeirah Village Circle and Business Bay, saw above average sales price growth.

This is due to a general increase in demand, and partly due to a significant increase in off-plan project launches and newly completed projects. For the most part, these new projects are characterized by high quality, compared to previous projects in these two categories, and are priced accordingly.

The off-plan property market continued to maintain impressive momentum, as local and international investors aggressively snapped up newly launched units, promising strong returns on investment in a tax environment favorable

In addition, some financing providers have begun to offer enhanced options for off-plan properties, allowing buyers to obtain up to 10% additional financing during the construction process. This additional funding is usually available for projects with construction growth of at least 50%, ensuring a certain level of risk mitigation for the financier. This move will stimulate the under-construction real estate market and also increase access for buyers.

The report also revealed that Dubai’s strong economic performance and attractive lifestyle remain among the main factors attracting expatriates, indicating that the emirate has strong components and foundations, driven by value. high investments in the real estate market, continued economic growth, infrastructure. development, and population growth.

The report indicated that approximately 6,750 residential units were completed in the Dubai market in the second quarter of 2024. The launch of projects continued at a strong pace, covering a wide range of low-rise buildings, skyscrapers and extensive residential communities. Although apartment and villa rental prices recorded quarterly increases of 3% and 2%, respectively, annual rental growth recorded single digits, as apartments saw an increase of 8% and villas of 4%. This increase is mainly due to a revised rent index by the Buildings Regulatory Authority, which allows landlords to increase rents when renewing. The report also indicated that the real estate market in Abu Dhabi is poised to continue its growth in 2024, supported by government initiatives and strong economic fundamentals.

According to the report, the Abu Dhabi market saw the delivery of around 2,400 housing units. Many residential and mixed-use projects are currently in the planning stages, and are expected to be launched in 2024, which will improve the real estate situation in Abu Dhabi.

In the rental sector, the market continued to register strong activity, particularly in luxury properties and villas. Average apartment rents saw quarterly and annual increases of 1% and 2%, respectively, while house rents maintained a consistent performance, showing a 5% year-on-year increase.

The market has also seen a steady influx of private and corporate investment, which has led to greater demand for high-quality office space, which in turn has led to significant rental growth. Class A offices in prime locations saw a significant increase (around 10%) compared to the previous year, with strong seasonal growth of between 3% and 8%, particularly for new deals.

In the second quarter of 2024, Abu Dhabi recorded 2,135 sales transactions, of which off-plan sales accounted for 57%.

Completed real estate transactions showed strong growth of 2.8% quarter-on-quarter and 33.1% year-on-year. Apartment sales prices continued to trend upward, with average quarterly and annual growth rates of 4% and 5%, respectively.