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Dubai, Abu Dhabi retail rents surge in double digits amid limited supplies

In Abu Dhabi and Dubai, the average rent increased by 5% and 14%, respectively

Retail rents in Dubai and Abu Dhabi have increased by double digits in recent months, due to a limited supply of high-quality stock and high demand.

Rents increased by 14.7% in the UAE capital and 10.5% in Dubai in the first quarter of the year, as reported by CBRE Middle East.

According to the real estate services company, some of the demand is coming from international retail brands trying to break into the local market, especially in Dubai. The food and beverage industry has a sizable demand as well.

“The supply-and-demand imbalance in both Abu Dhabi and Dubai continues to drive rental performance,” CBRE said, as reported by the Zawya.

“We are seeing an increase in the number of global and international retail brands looking to establish or expand in Dubai’s core locations despite the limited availability of stock and elevated occupancy levels,” it added.

Tenants in both emirates are searching for high-quality properties, especially in central areas. Nevertheless, CBRE stated that there isn’t enough stock available in the segment.

“The strong levels of demand seen in the UAE’s retail market have resulted in a discernible lack of quality assets,” Taimur Khan, Head of Research MENA in Dubai said.

“Although this is expected to continue to drive rental growth, it will likely put some pressure on new market activity, particularly given the scarcity of upcoming developments,” he added.

Industrial Market

CBRE reported “robust levels of demand” in the industrial market during the first quarter of the year. In Abu Dhabi and Dubai, the average rent increased by 5% and 14%, respectively.

“A number of new developments are scheduled for delivery over the remainder of the year; however, this is unlikely to exert downward pressure on rental rates,” CBRE noted.

Meanwhile, according to experts at hapondo, a platform for online real estate market research in Qatar, average apartments saw a decline in several areas during the first quarter of the year.

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