Dubai Real Estate: Tenants Flock to High-Quality Buildings, Driving Rent Increases

Dubai Real Estate: Tenants Flock to High-Quality Buildings, Driving Rent Increases

As the influx of high-net-worth individuals continues in the UAE, tenants are increasingly seeking better-quality properties, resulting in higher rents for new and Grade A buildings. In contrast, old and poor-quality buildings are facing challenges with rising vacancies, particularly in Sharjah.

According to Savills, a leading real estate consultancy, Abu Dhabi’s leasing activity remains stable, but most inquiries come from tenants looking to move to better-quality units. Rental values are expected to remain largely stable across good-quality Grade A assets. However, poor-quality older stocks are likely to witness an increase in vacancy levels and rental correction as tenants and end-users move to newer developments.

In the apartment category, Saadiyat Island recorded the largest increase of 36.8% in rents, followed by Al Reem Island (11.1%) and Al Reef (3.3%). JLL, another real estate consultancy, predicts that the capital will see the delivery of 2,000 units in 2022.

In Sharjah, Al Sharq, Al Qasimiya, and Al Khan recorded the highest increase in rentals, ranging from 16.7% to 25%, while Al Majaz and Muweileh saw a 9.4% increase. Savills expects a significant amount of residential supply to be handed over in Sharjah in 2023 and beyond, which could negatively impact older properties in the secondary market.

The high-end segment of the Dubai real estate market has seen robust demand, with occupancy levels estimated to be over 90%. Good quality stocks command a premium over the rest of the market, and average rents for a 1-bed apartment range between Dh35,000 to 40,000 per annum. Newer developments can command an additional premium of 20% or more.

In conclusion, as Dubai’s real estate market continues to thrive, tenants will continue to seek better-quality properties, driving rental increases for newer and Grade A buildings while older and poor-quality buildings will face rising vacancies and rental correction.

Invest in Dubai and Get Your Golden Visa Opportunity Today.

A golden visa card featuring the Dubai skyline, including the Burj Khalifa, with the words "Dubai Golden Visa" in bold script.

Contact Us By Submitting A Message. One Of Our Team Members Is Ready For Assistance

Join The Discussion

Compare listings

Skip to content