Springs villa rents jump up by 20%

Highlighting the fact that real estate investments pay off based on three critical factors – location, location, location – property consultancy CB Richard Ellis said in a new report on Tuesday that rental rates of Dubai villas in select communities have gone up by more than 20 per cent within one year. Two-bedroom villas in Dubai’s freehold community - Springs - located on Sheikh Zayed Road, witnessed the highest increase in lease rates, the agency said in its quarterly update on Dubai property market. “A 2-bedroom villa in the Springs, which was achieving a lease rate of Dh70,000 to Dh85,000 per annum in Q1 2011 [is] currently being offered in the range of Dh85,000 to Dh100,000 per annum – depending on the location and quality of the villa,” CBRE said. That’s an increase of between 17.6 and 21.4 per cent. “Areas offering an established community environment, combined with quality amenities and facilities continue to see the most impressive levels of growth and also remain in relatively short supply,” the research and property management consultancy noted. In aggregate, said CBRE, the emirate’s villa rentals saw an uptick for the first time since 2008-09, with average lease rates for Dubai’s villas going up by 3 per cent quarter-on-quarter, but are still 1 per cent below what they were a year ago. Within the villa segment, quarter-on-quarter rentals of freehold properties saw a 3 per cent rise in Q1 2012 while villas in leasehold areas saw rentals appreciating by just 1 per cent. “The highest increase in lease rates took place in the two-bedroom sector at 5 per cent, followed by five- and six-bedroom units which both increased by around 3 per cent,” the report stated. “For apartments, the highest increase in Q1 2012 was for one-bedroom units, which grew by 2 per cent during the quarter, whilst 3-bedroom units grew by 1 per cent,” CBRE pointed out. “Within the emirate’s freehold areas, the highest increase in lease rates took place in Greens at 7 per cent, followed by Downtown Dubai where rates grew by 6 per cent,” it added. “In the economy itself, the real estate sector continues to see some localised growth with an increase in the number of transactions for residential properties,” CBRE highlighted. Overall, citing Dubai Land Department data, CBRE said quarterly transactions in Dubai’s residential market totalled Dh3.1 billion, an increase of 9 per cent over the previous quarter. However, CBRE added that non-prime residential locations will continue to witness a deflation in lease and sales rates. “Emerging residential locations such as International Media Production Zone, Dubai Sports City (DSC), Dubai Silicon Oasis, Dubai Investment Park and Jumeirah Village continue to see deflationary pressures on lease and occupancy rates due to the current lack of facilities, amenities and developed infrastructure,” it said. “Lease rates in DSC range between Dh30,000-Dh36,000 per annum and Dh40,000-Dh55,000 per annum for one and two bedroom units respectively, unchanged from the previous quarter,” CBRE said. “On a year-on-year basis, apartment lease rates in emerging locations have fallen by around 7 per cent, with high vacancy rates prevailing,” it added. Gazing at their crystal ball, CBRE analysts said Dubai’s residential sector will continue to witness “area-specific strengthening of lease, sales and occupancy rates as pipeline supply in developed locations has become increasingly scarce.” The agency believes that the market for established villa locations such as Emirates Living, Arabian Ranches and Palm Jumeirah will remain strong during 2012 with limited new inventory expected in these locations. Nevertheless, Dubai’s overall villa supply, which remained more or less stagnant in the past few years, will swell up, with new supply expected in “emerging areas such as Jumeirah Park, Al Furjan and Jumeirah Golf Estates, which will result in expanding villa inventory in the next 12 to 15 months,” CBRE concluded. Residential rents in the Jumeirah Lakes Towers (JLT) master community are rebounding, with lease rates rising by over 10 per cent, quarter-on-quarter. This is likely to witness a further increase with the start of a feeder bus service earlier this month. Data provided by PropSquare Real Estate reveals rents of one-bedroom apartments have gone up to Dh45,000 to Dh60,000 per year in the first quarter 2012, compared to Dh40,000-Dh45,000 in the fourth quarter 2011. Rents for two-beds have jumped from Dh60,000-Dh70,000 to Dh70,000-Dh80,000, while three-bedroom units are available from Dh90,000-Dh110,000 compared to Dh80,000-Dh100,000. Asteco in an earlier report said that the hike was more moderate. Rents in JLT had gone up by four per cent in the first quarter compared to fourth quarter 2011. Studios were available for Dh35,000 pa, one-beds for Dh 45,000, two-beds for Dh 65,000 and three-beds for Dh90,000 pa. Information provided by Harbour Real Estate reveals rents have remained stable for one- and two-beds, while studio and three-bedroom apartments have seen a decline. Studios were leased on average for Dh42,500 pa in the first quarter, down from Dh45,000 last year, while three-beds are available for an average of Dh120,000 compared to Dh130,000 last year. Average rents for one- and two-beds continue at Dh60,000 and Dh82,500 pa, respectively . Jan Tabrizi, Manager – Residential Sales & Leasing, JLT Office, says: “Rents have increased due to JLT being popular for both commercial and residential purposes. “There are two Metro stations serving this community, therefore, it is easy access for people that live or work in these towers. “Also the apartments in JLT are usually very spacious and there are plenty of walkways by the lakes and lots of amenities for residents.” She believes that rents will go up by further five to seven per cent since the feeder bus service started in May. Emirates 24|7 reported earlier that Dubai Multi Commodities Centre (DMCC), master developer of JLT, had put back on track three “stalled” projects last year. In 2012, it expects three commercial towers, one residential and two hotel & hotel apartments to be completed in JLT. Four office towers were completed in 2011. JLT is a waterfront community, comprising 87 residential, office and mixed-use towers. In June 2011, DMCC told this website that no projects have been cancelled to date in the master development. The master development comprises 26 clusters of three towers or trios, with each trio having two towers of the same size and one tower that is five floors taller.The man-made lakes that consist of four separate water bodies will cover 179,000 square meters and will be approximately three-metres deep.