Landmark Advisory Abu Dhabi Leasing Guide: Average Rents in Capital Remain Stable

Landmark Advisory, one of the leading real estate consultancy companies in the Middle East, today launched its latest lease guide for Abu Dhabi, which can be used as a reference tool for clients looking to rent property in the capital. Compiled in collaboration with LLJ Property, a leading real estate agency in Abu Dhabi, the latest research reveals that average rents in Abu Dhabi, for both apartments and villas, remained relatively stable during Q309 and for the first part of Q409, only experiencing marginal declines. 

"Low quality units continue to be the worst performing assets. Declines, however, are largely marginal, which indicates rental stabilization," said Ms. Jesse Downs, Director of Research, Landmark Advisory. "In the apartment segment, while low quality units have declined up to 5%, good quality units remained without any significant change." 

The report found that continued demand for smaller units, which remain in short supply, has kept average rent levels for those units on Abu Dhabi Island quite high, with 1- and 2-bedroom apartments priced at AED 130,000 and AED 190,000 per annum respectively.

"A continued influx of young professionals seeking centrally located apartments keeps this sector buoyant," explains Andrea Menown, Leasing Manager at LLJ Property. "At the same time we have seen an increased level of demand for villas as existing residents, frustrated by congestion and parking issues affecting older centrally located apartments, move to good value off-island compounds offering community facilities and proximity to newly developed amenities." 

As with the apartment segment, villa rental levels have remained stable: "While low quality units slightly decreased up to 8%, good quality villas have held their value, especially on the 'main island' of Abu Dhabi. On the Abu Dhabi outskirts, rentals are now stabilizing after strong declines in the first half of 2009," explained Ms. Downs.

The latest research shows that rents in Al Raha Gardens slightly increased by 4% since early September, driven by demand from tenants attracted by good quality units at a reasonable rent level. 

Landmark Advisory predicts that apartment rents in older low quality buildings in the capital are likely to decline during Q4, as villas and 'off-island' living options become available: "Larger 3- and 4-bedroom apartments are likely to see a rent drop as more tenants will be attracted by off-island villa developments such as Al Raha Gardens or Al Reef Villas which offer more space, better quality, and affordable rent levels. Rents for 1- and 2- bedroom units are likely to remain stable, but low quality units are likely to decline. Even if there is a shortage of smaller units, many tenants are simply unwilling to accept high rent for low quality," said Ms. Downs. 

"Currently the rent levels of good quality units, both large and small, are stable, as the market continues to experience a shortage of this stock," adds Andrea Menown. "Developments offering added benefits such as parking, community amenities, sports facilities, retail and proximity to schools are holding steady in the market."