Study reveals massive commercial realty projects to lower rents in Dubai
According to Colliers International, one of the top three global real estate consultants, Dubai’s office tenants can look forward to a decrease in rents and a greater number of location choices as high rates of commercial construction activity come online. In the company’s Global Office Real Estate Review 2007, Dubai is ranked third in terms of global office space construction activity just behind Moscow and Shanghai. The emirate has more than 27 million sq ft of confirmed real estate development projects currently underway.
Ian Albert, Regional Director, Colliers International, said, “To put that in perspective, that’s approximately the same amount of office space as Geneva, Rio de Janeiro, Beijing and Singapore. As a result, this influx of space is expected to reverse the current supply-demand dynamics that characterize the market. Despite strong latent demand for office space, the sheer volume under construction combined with the period of delivery will have a marked impact on the competition between landlords, with a concurrent softening of rental levels and a greater number of tenant incentives on offer”.
At present, Dubai’s prime commercial real estate rents are still on the rise with rents in Dubai’s Central Business District offices registering steady increases over the past nine months. According to the Global Review, leases on high-end (Class A) and premium (Top Class A) space are receiving rents between $62 and $83 per sq ft per annum respectively up from $48 and $60 for the same in June 2006. Despite these considerable rental increases, Dubai is still significantly less expensive than London, Hong Kong, Tokyo, Moscow, Paris, Dublin, New York and both Mumbai and Delhi, and ranks 13th in Colliers’ Global Survey of the top 25 Office Occupancy Cost destinations. Source
Ian Albert, Regional Director, Colliers International, said, “To put that in perspective, that’s approximately the same amount of office space as Geneva, Rio de Janeiro, Beijing and Singapore. As a result, this influx of space is expected to reverse the current supply-demand dynamics that characterize the market. Despite strong latent demand for office space, the sheer volume under construction combined with the period of delivery will have a marked impact on the competition between landlords, with a concurrent softening of rental levels and a greater number of tenant incentives on offer”.
At present, Dubai’s prime commercial real estate rents are still on the rise with rents in Dubai’s Central Business District offices registering steady increases over the past nine months. According to the Global Review, leases on high-end (Class A) and premium (Top Class A) space are receiving rents between $62 and $83 per sq ft per annum respectively up from $48 and $60 for the same in June 2006. Despite these considerable rental increases, Dubai is still significantly less expensive than London, Hong Kong, Tokyo, Moscow, Paris, Dublin, New York and both Mumbai and Delhi, and ranks 13th in Colliers’ Global Survey of the top 25 Office Occupancy Cost destinations. Source
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