Growing supply 'brings abu dhabi rents down'

Growing supply, combined with a cutback in government spending on economic diversification and infrastructure upgrade, will put additional downward pressure on rents and real estate prices in Abu Dhabi, said a report.

Declining rents and increased vacancy will however have a positive impact on demand as Abu Dhabi becomes more cost competitive and higher quality real estate comes on stream, said the ‘Abu Dhabi Real Estate Market Overview – Q2 2011’ from Jones Lang Lasalle, a leading real estate investment and advisory firm.

The report illustrates that new supply deliveries were limited in Q2, but this is temporary because a significant supply pipeline remains for each real estate sector in Abu Dhabi.

The report also outlines a range of government initiatives, which Jones Lang Lasalle concludes will have a positive impact on demand and are a further step towards the maturation of the real estate market.

Source: TradeArabia.com