DUBAI - Residential rents saw more modest declines in Abu Dhabi during the third quarter, while office rents continued to tumble, CB Richard Ellis (CBRE) said on Wednesday.The real estate consultancy said in a report that residential rental rates fell around 5 percent on Abu Dhabi Island, the centre of the UAE capital, while off-island rates fell 8-15 percent.
Rents on Abu Dhabi Island fell 5-10 percent during the second quarter, CBRE said.
The consultancy said apartment rents fared relatively well during the quarter, with rental rates remaining unchanged in many locations.
“A trade-off between location and retail rates is becoming more evident, but drawbacks for these locations do exist in the form of limited access to public transpiration systems,” CBRE said in the report.
The UAE real estate market has been hit hard by the global economic downturn, with property prices and rents falling by around 50 percent from their 2008 highs.
Abu Dhabi has been less impacted by than its neighbour Dubai, but has still see significant price and rent declines.
CBRE said rents are likely to remain weak for the remainder of the year, before stabilising during 2010.
It said the Abu Dhabi market is expected to perform better compared to neigbouring emirates.
On the office front, CBRE said rents fell 3-17 percent during the quarter to 2,900 dirhams per square metre from 3,000-3,500 dirhams in Q2.
CBRE said office rents were down 40 percent in Q3 year-on-year.
“Despite healthy market fundamentals, unfavourable impacts of the crisis became more noticeable. Demand dropped sharply with agents finding it increasingly difficult to lease new commercial space,” it said.