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Home arrow News arrow Europe arrow Real estate markets in the emirate of Sharja remain resilient says Cluttons

Real estate markets in the emirate of Sharja remain resilient says Cluttons

Thursday, 09 May 2013
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The real estate market in Sharjah remains resilient and is one of the Emirate’s top performing sectors, according to the latest report from property firm Cluttons.

Residential apartments in popular areas have witnessed an average rental increase of 10 to 15% and in the commercial sector landlords are becoming increasingly flexible with their office leasing agreements, boosting demand.

The report says that the residential sector is witnessing a steady rise in average rents as demand outstrips supply for the first time since the global economic crisis.

Since October 2012, apartments in popular areas such as Al Majaz, Al Nahda and Qassimiya have witnessed an average rental increase of 10 to 15% and in desirable areas such as Sharghan, Al Fisht and Al Falaj, villas have seen a similar 15% increase due to strong growth in demand and a lack of quality stock.

However, Cluttons points out that these increases are applicable only to new lettings as the three year, no increase protection law still exists in Sharjah.
 
As the economies of both Dubai and Sharjah continue to improve, Cluttons expects the residential market to strengthen further and rents for both apartments and villas to rise over the next six months.

The office market has remained unchanged since October 2012, with average rents in the main business districts holding between AED50 to 80 per square foot. Landlords of a number of the more prominent office towers are now offering flexible lease agreements, which has helped attract tenants and increase occupancy rates.

Cluttons has noted an increasing demand for onsite amenities such as gyms, restaurants and cafes, and extensive renovation work has been undertaken on some older properties, further enhancing the desirability of Sharjah’s office market. Cluttons expects the current market trend to continue over the next six months, driven also by Sharjah’s position as a good start up location for smaller businesses.
 
The industrial property market is the most stable real estate sector and accounts for approximately one fifth of the Emirate’s GDP. The government recently has begun re-zoning parts of the industrial area close to the city centre as commercial land. As a result, it is expected that industrial tenants will move further out of the city towards areas such as Sajaa.

Since October 2012, industrial rents have remained steady, but certain areas further away from the city centre, like Industrial Area 18, are seeing a notable 15% rise in rents, with warehouse rents increasing from AED17 to AED 20 per square foot.
 
Cluttons says that many businesses are now looking to relocate from the older congested industrial areas to reap the benefits of improved infrastructure as well as newer, higher quality properties which meet the growing fire safety requirements of the Civil Defence Department. Cluttons speculates there will be further rent increases in newer developments over the next six months, but expects the rents to remain unchanged in the older, less popular areas.

Finally, Sharjah’s hospitality sector has also shown signs of continued growth, with a 9% year on year rise in guest numbers at hospitality establishments within Sharjah. The Emirate is proving popular with budget conscious travelers as an alternative to Dubai, with the majority of visitors from the GCC. The majority of European visitors are Russian.


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