Dubai office market continues to draw international investors
Showcasing the performance of 22 submarkets across the city in the first quarter of the year with the use of heat maps, Cluttons’ first office market bulletin highlights that, 13 submarkets witnessed no change in starting rents in 2015, whereas 7 submarkets witnessed notable increases and the remaining two saw lower limit rents decrease over the 12 months of 2015.
Faisal Durrani, Cluttons’ head of research, commented, “Despite sustained demand, occupiers remain cost conscious and budget driven in the face of a softening global economic backdrop, with the key word for many being ‘prudence’. Landlords, by contrast appear to be slow to react to the cooling market, with many reluctant to move on asking prices and others demonstrating a lack of flexibility for lease terms at renewal. The emerging gulf between market reality and landlords’ expectations is a concern, particularly for a market that is now starting to show signs of maturity.”
According to Cluttons Spring 2016 Dubai Office Market Bulletin, with the establishment of two new free-zones in the form of Dubai Design District (D3) and Dubai World Trade District in 2015, Central Dubai has become the focus of many occupiers and developers, particularly as it has long suffered from a demand-supply imbalance in the face of rising requirement levels. D3’s lower and upper limit free-zone rents have registered a 67% and 28% rise respectively since its launch, pushing them to between AED 150 psf and AED 165 psf. This sharp rise was also underpinned by the gradual fading of favourable terms offered to initial occupiers.
Cluttons data also shows that, the strongest performing submarket during 2015 in New Dubai was the Tecom Dubai Internet City, Dubai Media City and Dubai Knowledge Village area. Overall, this submarket experienced a 10% rise in lower limit rents to AED 165 psf, while upper limit rents rose 13% to AED 225 psf.
Web Site : http://www.cluttons.com/