Landmark Advisory Releases July 2009 Dubai Leasing Map

Dubai, UAE - July 22^nd, 2009: Today Landmark Advisory released its latest Dubai Leasing Map for July, which is the 5th issue of 2009. The rent ranges published in the leasing map – available at www.landmark-advisory.com – are prepared by Landmark Advisory analysts, whose methodology combines transactional data with intensive mystery shopping and broker surveys.

July's leasing map shows continued marginal rent growth in select areas. At the same time, rents in other areas continue to fall; in some cases, considerably. According to Jesse Downs, director of research and advisory services, “rent declines are largely due to a combination of increasing supply and weak demand for specific areas or developments.”

However, while relocations show definite trends, rent levels do not. The uneven movement of rents across Dubai points to continued volatility, as the market continues the process of price correction and discovery. Ms Downs explained that “isolated rental adjustments are symptomatic of specific and transient patterns that are likely to stabilize in the short- to medium-term.” She added that “observers should remember that current price movements are not necessarily indicative of broader market trends. It is still too early to call a price floor.”

The relocation trends observed since Q109 are still prominent, which has translated into new discernable demand characteristics. ”In other words,” said Ms. Downs, “some relocation patterns lead to increased aggregate demand. New leasing demand is coming from people leaving shared accommodations in favor of acquiring their own units.”

In addition, relocations continue from Sharjah and Abu Dhabi. When moving to Dubai, Abu Dhabi residents are motivated primarily by location, whereas demand originating from Sharjah centers on price. Al Qusais, however, is a notable exception to the price-driven demand from Sharjah. Due to its close proximity, Al Qusais has attracted many former residents, causing lower-limit rents to increase by AED 10,000-15,000 for all unit-types.

Arabian Ranches is an example of area-specific rent changes that do not reflect the whole market. Rents for 2-bedroom villas in Arabian Ranches fell between AED 10,000 (upper limit) and AED 20,000 (lower limit) last month, while rents for larger units increased. 3-bedroom villa rents (lower limit), for example, rose by AED 10,000, and 5-bedroom villa rents (lower limit) jumped by up to AED 50,000. Trends in this area show a demand shift from smaller to larger units, also applies to the Greens.

In contrast to Arabian Ranches and the Greens, upper limit rents for studios and 1-bedrooms increased in areas like IMPZ and the Views, while upper-limit rents for 5- and 6- bedroom villas in Al Barsha have fallen sharply by AED 60,000 and AED 90,000.

At JBR, rents increased across the board, but especially for studios and 3-bedroom units, which grew by AED 10,000 (upper and lower limit together) and AED 30,000-45,000, respectively. Jumeirah Islands also saw rents increase, with 4-bedroom rents rising by AED 10,000-20,000, and 5-bedroom rents climbing AED 40,000-60,000.

For further information please visit the Landmark Advisory website: http://www.landmark-advisory.com or follow Landmark on twitter @LandmarkDubai.