The report indicates that in the residential property sector, the expected yield is projected to reach 7% to 7.5%. Meanwhile, in the office category, the expected yield range for prime office spaces is between 6.5% and 7.25%, while for Grade A office spaces, it is between 7% and 7.5%.
The UAE currently has planned or under-construction real estate projects with a total value of $409 billion, representing 24.4% of the total projects in the Gulf Cooperation Council region. This demonstrates the UAE's significant position in the real estate market in the Middle East region.
The report also highlights that the UAE was the only residential market in 2023 to experience growth in both prices and transaction volumes. It is expected that in Abu Dhabi, transaction volumes will continue to grow in 2024, supported by the addition of high-end and high-quality residential inventory, leading to stronger average price growth rates. However, the performance of existing and outdated inventory may lag behind the market.
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For Dubai, CBRE forecasts a slight decrease in its real estate transaction volume. The report mentions that prices in the apartment and villa markets will continue to rise, but the pace of growth may slow down.
In the office space sector, the report suggests that tenant activity in the UAE may remain strong. With scarcity of supply and growing demand for prime assets, it is expected that high-quality and Grade A office assets will continue to outperform the market. In Dubai, due to limited pre-leasing activities in strong pre-sale development projects, rental rates are expected to continue rising, albeit at a slower pace, owing to the scarcity of existing prime inventory and increasing demand levels.
In the retail sector, average rents in Abu Dhabi and Dubai increased by 10.7% and 17.6% respectively last year. The report indicates that looking ahead, demand levels in both regions will remain strong. However, due to the continued scarcity of prime inventory, especially in Dubai, this remains a concerning issue. Therefore, it is expected that new leasing registrations will continue to slightly decline, although overall demand will remain positive. Rental rates are expected to continue rising, but the rate of rental growth in Abu Dhabi and Dubai will slow down.
