Wednesday, July 28, 2010

Further Pressure on Rental Rates in Dubai

Gulf News has an article about continuing declines in the Dubai residential and commercial real estate market.  And how this is causing an influx from other Emirates where the supply of "affordable" housing is currently constrained.

New supply is anticipated to exacerbate conditions.

Two sentences in the article caught my eye:
The main concentration of upcoming office supply will come from the Business Bay development. However this is expected to happen in 2011. "There are various infrastructure issues with a lot of completed towers sitting there," said Green.
Perhaps, The Real Nick can comment on what these are.   Utilities, especially electricity?  Or transport.  And of course any reader with a comment is encouraged to weigh in with a comment.   In general the more informative bits of info on this blog come from reader comments.

Continued weakness in real estate suggests issues for lenders on their existing portfolios.  And for developers fewer new projects and perhaps some customers' walking away from previous commitments - as lower rent rates imply a lower value of properties.

There's more to come on this topic.  CB Richard Ellis 2Q report on Dubai should be available on their website shortly.  When it is, I'll post again with the link.

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