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from arabian.business.com


Real estate rents and prices in Dubai's residential, office and retail sectors will continue to decline in 2010 while vacancies will rise, according to a new report published on Monday.

Jones Lang LaSalle MENA’s Dubai Real Estate Market Overview said the property market in the emirate would continue to become more favourable for tenants.

"This trend is likely to continue into 2010 with increased vacancies and a continued decline in average prices and rentals across the market," the report said.

It added that 2010 was likely to be characterised as a year of "selective stability".
"While average vacancies are expected to increase and average prices to fall, this will not be experienced uniformly across all projects or locations, with a flight to quality resulting in an increasingly two tier market emerging during 2010 in which better quality projects and locations will benefit from selective stability," JLL's report said.

On Dubai's residential market, Blair Hagkull, managing director of JLL MENA, said: “Prices seem to have stabilised over recent months, despite the existing over-supply situation. Stabilisation of transactional volumes is another positive indicator of investor confidence but the lack of housing finance remains a major challenge in Dubai."

With an additional 24,000 units expected to be completed in 2010 and 25,000 units in 2011, there may be an emerging opportunity for both investors and financers in the Dubai residential market as it has already seen a significant level of pricing adjustment in 2009, he added.

Hagkull said vacancy rates in the Dubai office market were likely to increase from their current level of around 33 percent during 2010.

“The tenant is becoming the ultimate winner as the office market is going through a significant adjustment with more vacancies and cheaper rents on offer. This scenario is encouraging for businesses as it offers multiple options for expansion and relocation as Dubai becomes more competitive office location both locally and regionally," he said.

Dubai retail sector would also see a shift in favour of tenants in 2010, he said, adding that average rentals have declined by around 29 percent from Q4 2008 to Q4 2009 and by 13 percent from Q3 2009 to Q4 2009 on the back of a 15-20 percent decline in retail sales in 2009.

Hagkull said: “This is an interesting time as the dynamics of the Dubai retail market continues to swing in favour of tenants due to falling rents and increased vacancies in some centres.

"In spite of the cut back in future supply levels, we expect to see an increase in shorter leases, break clauses and rent free periods as we go through this tectonic shift in the market. There will be more and more incentives for tenants due to the shift in power from landlords to tenants."

Much better for you to copy and paste Concs, it saves me having to read the same old spelling mistakes.