Latest Landmark Advisory Sales and Leasing Report: Dubai Prices Continuing to Fluctuate

Dubai, United Arab Emirates - December 22^th, 2009:

Landmark Advisory, one of the leading real estate consultancy companies in the UAE, today released its latest Sales and Leasing guide for the Dubai market. The guide, which can be used as a reference tool for clients looking to rent or buy property in the UAE, focuses on the price changes for residential and commercial property sales over the past three months and the change in rent prices for leased units over the last two months.

The latest research reveals an increase in sales and rental activity targeting more mid-range quality and locations over the past three months. “The ‘flight to quality’ trend, witnessed in Dubai over the past six to nine months, continues to be driven by value-conscious middle-income end-users and families focused especially on value and size,” said Ms. Jesse Downs, Director of Research and Advisory Services at Landmark Advisory.

“However, for both villas and apartments, we have noticed that sale prices dip around the time of handover,” Ms. Downs continued. “This is usually due to owners grappling with their final payment obligations, while also readjusting unrealistic price expectations. In addition, buyers can then benchmark new units against other completed developments.”

In terms of apartment rents, the report reveals that leasing rates over the past two months have largely stabilized, with rents in some areas increasing in response to steady demand. For instance, the areas buoyed by Abu Dhabi demand, such as good quality units in JLT, have seen lower-limit rents grow by 9%.

“The flight to quality trend continues across Dubai, with lower-limit rents for high-end units in Downtown Burj Dubai increasing 13%. However, lower quality units have failed to show similar rent growth, while some areas continue to decline. An example of declining rents can be found in the Country Cluster units within International City, whereose lower-limit rents fell12%,” explained Ms. Downs.

The guide shows that Dubai apartment sale trends are similar to leasing trends.. Sale prices for Palm Jumeirah apartments climbed 7%, while more average quality developments, such as International City, declined 10% in the lower-limit over the past three months.

“We have seen that while sale prices for 1-, 2-, and 3-bedroom apartments in some areas are increasing, the studio prices are falling,” commented Ms. Downs. “This is largely due to supply imbalances and waning demand; during the off-plan frenzy of 2005-2008, studios were overbuilt to maximize revenue without consideration for demand fundamentals. On the demand side, buyers are less interested in purchasing studios.”

The research also looks at leasing rates and sale prices for villas. Villa rents have largely stabilised over the past two months, with strong demand boosting rent levels in key areas, like Jumeirah and Emirates Living. Sale prices for villas have remained consistent over the past three months. Taken together, these points indicate relative stability in the villa segment.

With regard to commercial units, sale prices have declined over the past three months. “Some demand has returned, with many value-driven customers looking for bargains,” explained Ms Downs. “In terms of leasing, we have seen that commercial rent prices have stabilized in some areas, albeit temporarily. Based on our current research, we predict that average commercial leasing rates will continue to decline in 2010, as a natural consequence of the anticipated supply glut materialising.”

Looking forward, Landmark Advisory predicts that stratified ownership and licensing issues will have a significant impact on the future sale prices and rental trends of commercial units in Dubai, while quality and maintenance fees will continue the differentiation of sales prices and rents.

To acquire the sales and leasing guide, or for further information, please visit http://www.landmark-advisory.com, or follow Landmark on twitter@LandmarkDubai. Landmark Advisory welcomes your opinions about regional real estate and has recently launched the Landmark Connect online research panel. To share your views, visit http://www.landmark-advisory.com/index.php?landmark-connect.

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About Landmark Advisory

Landmark Advisory was originally established in September 2006, under the name of Landmark Consulting Associates, with a mission to provide superior generalist advisory services in the areas of development and planning. In April 2008, Landmark Advisory was established and has brought with it the experience and network of Landmark Consulting Associate’s years of existence.

Jointly owned by a dynamic group of partners, Landmark Advisory’s founding members are the same group of professionals that founded Landmark Properties L.L.C, one of Dubai’s leading real estate brokerage. Landmark Advisory’s link into Landmark Properties, offers the group a unique position to closely study the real estate market, providing unparalleled access and perspective of the rapidly changing and expanding MENA market.

Our network of professionals dedicate themselves to thoroughly collecting and analysing information to illustrate opportunities that exist in this fast-paced industry. Furthermore, our specialised knowledge and experience within the MENA region, gives Landmark Advisory the confidence to accurately advise our clients around the world in making well-informed and intelligent real estate decisions.

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