Tenants in the Northern Emirates are continuing to move from one emirate to another in search of better accommodation and to be closer to their workplace, according to a report by Asteco, the largest property services company in the United Arab Emirates.
“It is imperative for landlords to offer tenants attractive incentives to ensure long-term tenancy agreements,” said Elaine Jones, CEO, Asteco Property Management, commenting on the company’s report on the property market in the Northern Emirates for the first quarter of 2010 published today (19 April 2010).
According to the report, the residential leasing market continues to see a decrease in rental rates with Umm Al Quwain and Fujairah recording the smallest decreases of minus 4% on average. There were no noticeable price changes for studio apartments in Umm Al Quwain and Fujairah.
Ajman and Ras Al Khaimah registered the largest decrease with rental rates dropping by 7%. The largest decrease per bedroom type was recorded in Sharjah with one-bedroom apartments contracting by 9%.
The report also highlights the Sharjah office leasing market slowing down marginally from minus 9% in the previous quarter to minus 6% in the first three months of this year.
The Sharjah residential market continues to experience a gradual drop in rental rates with a significant number of tenants relocating closer to their workplace, the report says. “As rents continue to fall in certain areas of Dubai such as Discovery Gardens and International City, the prospect of a reduction in travelling time becomes more appealing.
“This decline in rental rates is exacerbated by the number of vacant units available in the market, making properties more competitive combined with a lack of quality accommodation - despite the fact that a number of new towers have been constructed over the last few years.”
Properties in Ajman are in a similar situation to those in Sharjah, says Asteco, with a significant number of people relocating from one emirate to another in order to be closer to their workplace.
“The concentration of unoccupied properties is mainly within the city centre, with a smaller percentage of vacancies close to Ajman Free Zone and the surrounding areas. Those properties on The Corniche, or with a sea view, continue to attract interest from tenants working in Ajman.”
Meanwhile, the Sharjah office market continues to see a decline in rental rates due to the economic downturn and competition from neighbouring emirates, particularly Dubai. “The demand for smaller units continues, albeit on a much smaller scale. Not until the economy makes a full recovery and confidence returns will the office market in Sharjah begin to see a return to health,” the Asteco report says.
