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The UAE’s Occupier Sentiment Index (OSI) fell from 42 to 20, but remains comfortably in positive territory, according to a new survey by the Royal Institution of Chartered Surveyors (Rics). Growth in occupier demand continues to outpace that of supply of space to let — although less so than in the last quarter — and as a result there remains upward pressure on rents in the primary and secondary markets.
The survey also noted that the UAE’s Investment Sentiment Index fell from 24 to 10, its lowest since the middle of 2012. Nevertheless it indicates that sentiment remains positive overall. Credit conditions continue to ease, according to the survey respondents.
Rics said investment inquiries continued to grow during the fourth quarter, but at a slower pace than the same time the previous year. This is in support of the 12-month outlook for capital values in both prime and secondary markets — perhaps slightly more so in the prime segment.
“UAE economic growth remains robust, buoyed by the construction, logistics and hospitality sectors, which is feeding through to inflation,” Rics said in a media statement.
“Because the dirham is pegged to the [US] dollar, financial conditions in the UAE have been tightening through last year in anticipation of normalising monetary policy in the US.
“This has been weighing on investor sentiment of late, although during the fourth quarter sentiment turned slightly more positive.”
Prime prices are expected to grow by around 3.5-5.5 per cent, while secondary prices are expected to rise by about 2-3 per cent.
Source: Special to Property Weekly