Real estate performance during 2015 remained largely stable as developers adjusted to lower oil prices, reduced government spending and a significantly slower rate of economic growth than in recent years by reducing levels of new supply, states JLL’s report based on annual review of the UAE real estate market for 2015.
Retail rents have remained largely unchanged in both Dubai and Abu Dhabi. However, the retail market is generally likely to move more in the tenants’ favour in both markets in the short term as the rate of growth in retail sales slows down at a time of increasing new supply.
“The growth in retail sales has slowed in the UAE during 2015 with some retailers struggling to meet high rental rates. This in turn has forced landlords to offer discounts and attractive deals to gain and retain tenants. Further rental growth is likely to be limited to turnover provisions rather than base rental increases in most malls during 2016,” says Craig Plumb, head of research at JLL MENA.