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International ratings company, S&P has reaffirmed Ras Al Khaimah’s (RAK’s) long-term foreign and local currency Issuer Default Ratings (IDR’s) at ‘A/A-1’ and has also categorised the Emirate’s outlook as stable.
RAK’s hospitality market has outperformed the wider UAE tourism industry by recording a 10.9% increase in full year visitor arrivals and a 9.8% growth in the average occupancy rate, taking the annual occupancy to 71%.
Hotel revenue rates experienced positive growth, with a 5.5% increase in average RevPAR’s across the Emirates hospitality properties.
Average residential rental rates are starting to edge towards stabilisation, with just a minor 1% decline recorded during the quarter, taking the full year drop to 4%.
The Emirates NBD UAE Purchasing Managers’ Index (PMI) report, which measures the health of the country’s non-oil private sector, indicated a further softening of positive performance during the month of September. The index has now fallen from 55.3 in July, reaching 54.7 in August and 54.1 in September. Whilst the reading still reflects positive growth, it underlines the presence of challenges in the economy, including the modest employment creation reading.
According to the International Monetary Fund (IMF), the UAE’s GDP growth will fall to 2.4% during 2016, down from 3.9% in 2015. However, Dubai is expected to outperform the UAE average, by posting growth of around 3.7% in 2016, up from 3.6% during 2015.
Average residential rental and sales rates continue to fall across Dubai, but performances are highly fragmented by location. Sales rates declined less than 1%, whilst rental rates fell 1%.
According to STR Global, average hotel occupancy rates in Dubai dropped around 0.5% year-to-date as compared to the same period last year.
During June 2016, Qatar’s inflation rate was posted at 2.5%, the lowest since the end of 2015, although, according to the Ministry of Planning Development and Statistics (MDPS), inflation is expected to pick up to around 3.4% during 2016 overall.
As per the Qatar Economic Outlook, the country is poised to grow at around 3.6% growth (real terms) during 2016 – 2018. This is supported by continued public spending, private construction activities and sustained population growth.
Prime office rentals have declined by an average of 6% over the last six months and 8% year-on-year. This reflects the emergence of weaker demand fundamentals from government entities and oil and gas companies.
Average residential rentals have declined by around 2% over the last six months and 4% year-on-year. However, prime properties in locations such as Pearl Qatar and other individual properties have seen more significant declines during this period.