Abu Dhabi to add 23,000 residential units in 2012

A further 23,000 residential units is set to be handed over in Abu Dhabi this year, putting downward pressure on rents and prices. An estimated 600,000 sq m of new office space is also expected to be delivered in 2012, it has been announced in the run-up to real estate exhibition Cityscape Abu Dhabi which takes place in April. Analysts warn that downside risks still persist with the imminent delivery of new developments for the year in both the commercial and residential sectors. According to research carried out by CB Richard Ellis, residential rental rates on the main island fell by 16 per cent year-on-year, while declines on the Abu Dhabi mainland were more pronounced with a 30 percent drop. For the office sector, by the end of 2011, total supply in the Emirate had reached 2.74 million square metres, with average office rental rates ending the year at AED1,400 per square metre per annum. "The overall fundamentals of the Abu Dhabi real estate market remain strong with both economic and population growth anticipated for the year ahead," said Matthew Green, head of research & consultancy UAE, CBRE. "Despite a more constrained transactional market, the occupier segment is starting to show more signs of life with limited available completed stock helping to maintain high occupancy rates from premium offerings." He added: "The existing CBD should also remain in high demand for both residential and commercial spaces, particularly as Abu Dhabi awaits further completions of projects in Sowwah Square, Marina Square and the wider Reem Island development." Chris Speller, group director for Cityscape Abu Dhabi, said: "The Abu Dhabi real estate market is now a far more stable environment with sales and rental rate declines slowing against the same period last year. "There is some downside pressure still present in the market, although the increased level of options is good news for occupiers." Now in its 6th year, Cityscape Abu Dhabi last year attracted more than 25,000 visitors from 78 countries. The four-day real estate event takes place from April 22-25.