UAE\'s real estate market robust

Sentiment in the UAE real estate investment market improved during the second quarter (Q2) of 2012, boosted by the rising availability of funds for investments, reports RICS in its latest Global Commercial Property Survey. On the investment side, purchaser enquiries rose for the second consecutive quarter and transactions are forecast to rise in the coming months. Significantly, expectations for capital values in the UAE for the third quarter show a modest increase for the first time since 2008. According to the RICS survey, 16 per cent more respondents indicated that money available for investment in real estate increased during the second quarter of the year. Meanwhile occupier demand, led by an active retail sector, continued its rise, though at a slightly slower pace. New supply coming on to the office market adds to existing stocks so that despite the recovery in demand the oversupply situation continues to impact upon rental expectations. Elsewhere, following on from strong first quarter results, the real estate market in North America and Canada has remained buoyant in both occupier and investor markets despite the global economic slowdown. China and Hong Kong also appear to have relatively resilient occupier markets for the time being. However, once again, the survey shows a generally weaker picture across Europe, with signs of stress spreading from the periphery to other markets. Greece, Spain, Portugal, France and Italy in particular showed signs of distress during this quarter of the year, with both sentiment and activity levels suffering on the back of elevated uncertainty. Commenting on the latest survey results, Simon Rubinsohn, RICS Chief Economist, said: “It is encouraging that there are now some tentative signs of a turn in the real estate market in the UAE. At the moment, this is more visible in the investment market and it will take some time to work off the excess space that has built up in recent years.” “As a result, it may be premature to envisage any upturn in rent levels but after a torrid period, the indications are that that they are at least now close to stabilising,” Simon Rubinsohn added. In a continuation of its recent strong performance and with a total value of over Dhs2 billion, Dubai’s Real Estate industry achieved the highest number of unit sales and corresponding total unit value for any month of July on record according to data sourced from the Dubai Land Department. With 1,767 transactions, the industry saw over 193,629 sqm (2.084Mill sq ft.) of property units sold during the month showing demand for Dubai property units continues. Consistent with recent trends, the top performing areas were Dubai Marina, Downtown and JLT where the combined value of the transactions from these areas accounted for approximately 67 per cent of the total value of unit transactions during the month. “The recovery is certainly with us,” said Mohanad Alwadiya, Managing Director of Harbor Real Estate in Dubai. “Confidence is returning to the market and, when considering the latest reports regarding healthy profits and renewed activity by several leading developers, the industry is certainly looking vibrant again.” Alwadiya was referring to announcements made recently by Emaar regarding an 82 per cent surge in profits in the first half of 2012 along with renewed interest in developing a townhouse project in Dubailand. Nakheel has also returned strong profit growth for the first half of 2012 up 36 per cent from the same period last year. The company, restructured as a result of the global financial crisis, is also planning new developments based upon the resurgence in demand for Dubai property. “We have all been waiting for this time, when optimism based on growing confidence would return to the market,” said Alwadiya, who added, “The growth trend is looking very exciting.” From gulftoday