Asteco: Al Ain Focus Q3 2011
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The road to home finance has been a long one for the Kingdom, but with its highly anticipated mortgage law edging ever closer to ratification, would-be homeowners and financial institutions are gearing up for a new era of opportunity.
With the announcement this year of a US$66.7 billion initiative to address the demand-supply imbalance in the Kingdom’s housing market, social infrastructure spend is topping the Government agenda as it focuses on building affordable homes for the future.
The South-East Asian island has seen a number of distinctive developments come to fruition over the past few years as the country further establishes itself.
Following the previous strong declines in the apartment sector, tenants have taken the opportunity to move to better quality accommodation.
This increased demand for newer buildings has led to an 8% increase in rents.
Rents in older buildings, however, have declined by 3% compared to the previous quarter, whereas rents for villas have fallen by 5%.
Against all expectations, the office sector in Al Ain was faced with falling rents this quarter.
One of the main reasons for this is the fact that the planned establishment of several companies, government and semigovernment entities in Al Ain has been put on hold.
In addition, several job cuts have led companies to rethink their expansion plans for the present time.
Retail rates have also dropped by 5% on average due to the extension of the Al Ain Mall.
This increased supply, combined with the uncertainty of economic growth, has resulted in tenants being more cautious about expanding and setting up in Al Ain, forcing mall owners and landlords to be more flexible in terms of rental rates.
Retail rents are expected to come down further as the new mall by Sorouh in Al Naqafa opens in the coming months.
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