The coronavirus pandemic has marked the first half of 2020. Government restrictions imposed in order to contain the spread of the virus have caused significant disruptions across different sectors, including the commercial property market. To mitigate the sometimes dramatic negative impact, the UAE government has introduced substantial relief packages, while the Central bank offered lower interest rates.
However, even with these relief packages, the market was significantly disrupted by this pandemic, and we can see a significant dip in April and May, with transactions going down from 3,398 million AED in February to just 504 million AED in May. On the positive side, the market started recovering rapidly in the following months – the total value of transactions increased to 1,610 million AED in June, and the trend continued in the coming months.
When we look at the selling prices of the properties in the top communities for commercial real estate, there were not many significant changes compared to the previous period. The prices in Jumeirah Lakes Towers range from 300 to 900 AED per sq.ft., Business Bay 600 to 1,100 AED per sq.ft., and 400 to 800 AED per sq.ft. in Barsha Heights (TECOM).
Interestingly, the number of buyer leads have increased in June 2020 by 8% compared to the data from the beginning of the year. We have seen an even more significant increase in the number of tenants registered with CRC – 14% more compared to the data in January 2020.
In the commercial property leasing department, one of the trends we followed closely is the number of cheques in rental agreements. The most popular options in this quarter were contracts with four cheques (55%), followed by those with 1 (21%) and 2 (15%) cheques. Leasing price ranges in H1 2020 in the most popular areas at CRC were as follows, Jumeriah Lakes Towers 35 – 75 AED/sq.ft. Business Bay 40-100 AED/sq.ft., and Sheikh Zayed Road 80-130 AED/sq.ft.
Overall, It has been quite an exciting market since we came back after the lockdown. We have seen an immense amount of inquiries from both tenants and buyers alike, which came as a surprise since we did not anticipate the market will pick up so fast.
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