The real estate services firm said that the addition of 3,000 new units, mostly apartment developments, into a market already suffering from oversupply during the quarter was partly to blame for causing rental and capital values to falter.
Despite this, take-up at high-end projects such as TDIC’s St Regis apartments on the Saadiyat Island development has been positive, Cluttons said, highlighting demand for well-planned communities with high quality facilities.
The release of an anticipated 38,000 units into the market between now and 2012 could push rents down further, Cluttons added.
The report said that office rental levels have remained static over the last year, with net primes rates reaching an average of AED1,800 (US$490) per sqm per annum. Prime mall space hit a top rental rate of AED3,500 to AED4,000 per sqm per annum, although the opening of several major new mall projects over the next 18 months could impact this.
The International Monetary Fund recently revised upward its growth projection for Abu Dhabi’s economy in 2012 4.2 percent and 5.5 percent as the emirate ramps up attempts to diversify its economy away from oil, which have included the recent opening the US$7bn Khalifa Port.