Dubai-Mubasher: Demand for office space in Dubai declined in the past six months, affected by the oil price decline and the economic slowdown in the rest of the Gulf, according to Cluttons’ bi-annual Dubai office market bulletin.
Decisions to acquire, expand or move office space have commonly been put on hold, as firms reconsider their future strategy in the wake of global economic challenges, resulting in an exaggeration of the seasonal summer slowdown throughout the end of the second quarter and the beginning of the third quarter this year.
“Free-zone areas have remained in relatively high demand. This includes areas like TECOM’s Dubai Internet City (DIC), Media City (DMC) and Knowledge Village (DKV), DIFC and Dubai Design District (D3), which all contain internationally recognised Grade A space,” Cluttons said.
“As such, the prime, central areas of these free-zones have very low vacancy rates, of around 5%, compared to submarkets such as Sheikh Zayed Road (Trade Centre), which has stock of mixed quality and age, and vacancy rates closer to 20%,” the statement noted.
Rents remained stagnant in the second quarter of 2016, with falls recorded in six of the 22 submarkets, the bulletin noted, adding that rents are not expected to fall much further.
“Despite the slowdown, a number of submarkets contain buildings that do not follow the same trajectory as the wider market and have rents that go beyond the upper limit figures as they are considered flagship, prime, signature schemes,” according to Faisal Durrani, Head of Research at Cluttons.
