UAE: Tenants increasingly move to higher quality buildings, push up rents in new properties

In the UAE, tenants are increasingly opting for high-quality properties, resulting in higher rents for new and Grade A buildings. This trend is being driven by the continued arrival of wealthy individuals. Conversely, older and lower-quality buildings are facing rising vacancies, particularly in Sharjah. While rents rose in some areas last year due to a shortage of ultra-luxury units, the market has now stabilized after a period of significant increases. Leasing activity in Abu Dhabi remained stable, but there was greater demand for better-quality units.

Saadiyat Island experienced the highest increase in apartment rents at 36.8%, followed by Al Reem Island (11.1%) and Al Reef (3.3%). Al Raha Beach rents remained constant. In the villas/townhouses segment, Saadiyat Island also recorded the highest increase in rents at 36.8%, followed by Al Reef (7.7%) and Al Raha Garden (6.9%). Hydra Village and Gold Gardens saw no change in rents. JLL predicted the delivery of 2,000 units in the capital in 2022, and Savills anticipates a significant increase in residential supply in Sharjah from 2023 onwards.