Abu Dhabi Office and Residential MarketView Q1 2017
According to the Statistics Centre-Abu Dhabi (SCAD), inflation for Q1 2017 remained low at 2.2%.
Credit ratings agency Standard & Poor’s has forecasted that Abu Dhabi’s budget will return to a small surplus in 2017, after recording a deficit during 2016 amidst challenging economic conditions and low oil pricing.
Abu Dhabi has officially reinstated the rent cap system, although with the slowdown in the market and overall residential demand, the regulation is unlikely to have a significant impact in the short term.
Brent Crude Oil averaged around US$54/barrel during Q1 2017, up by 59% from the Q1 2016 average of US$34/barrel.
Prime offices registered average rentals of AED1,750/sqm/year, 5% lower than at the same point last year. Secondary office rentals continued to slide, reaching AED AED935/sqm/year, translating into an 8% drop year-on-year.
According to figures from STR, the hospitality market has witnessed further declines across most performance metrics on a year-to-date basis, with occupancy rates down 4.3% year-on-year, ADR’s down 4.4% and RevPAR down 8.4%.