Prime residential properties in the UAE are anticipated to deliver returns ranging from 6.25% to 7%. This finding aligns with the broader residential market, which is expected to see yields between 7% and 7.5%.
The office sector also presents attractive opportunities, with prime and Grade A assets projected to yield between 6.5% and 7.5%. The UAE’s real estate market holds a significant position within the Gulf Cooperation Council region, with ongoing and planned projects valued at $409 billion, representing 24.4% of the total. Notably, the UAE remains the sole market in the region to experience simultaneous growth in both property prices and transaction volumes during 2023.
Abu Dhabi’s residential market is expected to witness continued growth in transaction volumes throughout 2024. This trend is likely fueled by the introduction of high-end and prime properties, which are anticipated to drive stronger average price increases. However, the report cautions that existing and outdated properties will likely underperform the market.
Dubai’s residential market, while still experiencing price growth in both apartments and villas, is forecast to see a slight moderation in growth rates throughout the year. Transaction volumes are also expected to experience a marginal decrease.
The office market across the UAE is projected to maintain steady occupier activity. Prime and Grade A assets are expected to outperform the market due to limited supply and increasing demand for high-quality spaces. In Dubai, the lack of existing quality stock, coupled with high demand and limited upcoming developments (which are already experiencing strong pre-leasing activity), suggests that rental rates will continue to rise, albeit at a slower pace compared to the previous year.
The retail sector witnessed significant rental growth in 2023, with increases of 10.7% and 17.6% in Abu Dhabi and Dubai, respectively. While demand is anticipated to remain strong in both cities moving forward, the lack of quality retail space, particularly in Dubai, is a key concern.
Consequently, the report forecasts a slight decline in new rental registrations despite an overall positive net demand. Rental rates are expected to continue increasing, but at a moderated pace in both locations.
Publish Mar 07, 2024
Source: https://www.zawya.com/en/business/real-estate/uae-real-estate-yields-likely-remain-strong-study-shows-tltph8w6/
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