UAE: Tenants increasingly move to higher quality buildings, push up rents in new properties

UAE: Tenants increasingly move to higher quality buildings, push up rents in new properties

Tenants in the UAE are increasingly moving to better quality properties, pushing rents higher in new and Grade A buildings on the back of continued influx of high-net-worth individuals.

Rents in old and poor-quality buildings, on the other hand, are facing vacancy increase challenges, especially in the emirate of Sharjah.

Rents continued to rise last year in some areas in the country due to a shortage in units in the ultra-luxury category, as a large number of expatriates flocked to the country in the post-pandemic period. However, rents are now stabilising in following the major increase in the last couple of years.

Real estate consultancy Savills said leasing activity remained stable across Abu Dhabi. “However, the bulk of inquiry levels were observed from tenants moving to better-quality units.”

In the apartment category, rents in Saadiyat Island recorded the biggest increase of 36.8 per cent, followed by Al Reem Island (11.1 per cent) and Al Reef (3.3 per cent). Rents in Al Raha Beach remained steady. In the villas/townhouses segment, Saadiyat Island again topped with a 36.8 per cent jump in rents followed by Al Reef (7.7 per cent) and Al Raha Garden (6.9 per cent). Rents were steady in Hydra Village and Gold Gardens.

JLL,