GCC Real Estate in Q1 of 2013

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· Markets continued to maintain uptrend in 1Q13
· UAE and Saudi markets continue to lead while Kuwaiti market catches up
· Government support & improved market sentiment to boost the sector

UAE

Dubai’s real estate market outperformed that of Abu Dhabi in 1Q13. Rental rates increased almost 10% QoQ in Dubai’s residential market, while Abu Dhabi’s residential market saw rental growth of 8%QoQ. In the hospitality segment, Dubai’s occupancy level increased 2 percentage points to 88% in 1Q13, while that of Abu Dhabi rose 8 percentage points to 71%. Office rental rates rose 10%QoQ in Dubai, but were stable in Abu Dhabi. Overall, prime properties drove the market, while lower grade stock was under pressure.

Saudi Arabia

The Saudi Arabian real estate market continued to remained mixed in 1Q13 with the Jeddah market maintaining its uptrend while the Riyadh market struggling in some segments. The residential segment remained upbeat in both the markets. However, the office and hospitality segments in Riyadh continued to deteriorate. In contrast, The Jeddah market saw upbeat activity in its office and hospitality segments.

Bahrain

Bahrain’s office and residential rental markets gained stability during 1Q13. Market sentiment continued to improve, underpinned by strong economic outlook and political stability. The residential and office rental markets are expected to remain stable in the coming quarter, while supply shortage would boost rents in the industrial segment.

Kuwait

The overall traded value of real estate properties increased 2.3%QoQ to KWD766.5mn in 1Q13. The market is gradually recovering owing to strong government support and improving consumer sentiment. Thus, we expect sales prices to increase in the following quarters.

Oman

The overall real estate market started recovering in 1Q13 led by the residential and retail segments. The recovery is being driven by strong economic growth and improvement in consumer sentiment. Demand for high-quality office space was robust, while the overall residential market saw an uptrend in rental rates and transactions.

Qatar

Qatar’s real estate market continued to remain static in 1Q13. Some pockets, especially Pearl-Qatar, have witnessed marginal upward movement in rental rates due to shortage of quality properties. However, supply continues to rise for the rest of the market, thereby keeping price growth subdued during the quarter.

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