Residential rents in Dubai fell by 2 percent during the third quarter of 2015, according to a new report by Abu Dhabi Islamic Bank (ADIB) and its real estate advisory subsidiary MPM Properties.

Capital values for completed apartment units fell 9 percent year-on-year, with the highest drop registered across prime developments, which had seen a substantial rise in the rate of sales since the second half of 2013.

The report added that on the supply front, around 2,000 new units were completed in the quarter, mostly in leasehold areas.

It said the total value of residential apartment transactions fell by 8.6 percent quarter-on-quarter, from AED4.62 billion ($1.25 billion) in Q2 to AED4.22 billion in Q3 2015.

This is in line with past trends, with the third quarter of the year tending to be a relatively quiet period for the real estate market because of the peak summer and holiday season, the report said.

It added that the controlled supply of new office space, coupled with continued positive occupier sentiment, is helping to maintain Dubai’s healthy rental and occupancy levels in the office market.

The Dubai office market remained stable quarter-on-quarter despite a rise in new stock, as demand for office space continued to show an upward trend, mainly from start-up companies. Prime Central Business District (CBD) rents ranged between AED 110-220 per square foot per annum while secondary locations have recorded rents ranges between AED70-200 per sq ft per annum.

The report said Dubai’s retail sector witnessed a marginal drop in footfall and spending during Q3, with a number of major retailers reporting slower sales year-on-year.

"This could be largely attributed to a fall in spending by tourists, who are key drivers of demand," the report added.

“Much of the impact has been noticed across the luxury retail segment due to global currency fluctuations and falling oil prices. However, overall prime retail assets remain strong performers and demonstrate positive growth with waiting lists for space still over-subscribed despite expansions,” said Paul Maisfield, CEO of MPM Properties.