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Abu Dhabi, Dubai office rents falling, will drop further on supply abundance
Source: BI-ME with Bloomberg , Author: Posted by BI-ME staff
Posted: Thu July 29, 2010 12:01 pm
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UAE. Abu Dhabi office rents fell 27% in the second quarter from a year earlier and will drop further as supply increases by more than half through 2012, Jones Lang LaSalle Inc. said.

Vacancy rates reached 8% in the quarter and will also probably increase over the coming years, the property broker said in a research report published today. An abundance of supply in neighboring Dubai will help push down rents, Jones Lang said.

Office rents in Dubai dropped as much as 17% in the second quarter as new space outstripped demand, CB Richard Ellis Group Inc. said in a separate report today.

In Abu Dhabi, a shortage of Grade A office space is likely to widen the gap between rents for the best buildings and lower- rated properties, Jones Lang said. A significant share of the offices under construction the United Arab Emirates capital won’t meet international Grade A standards, it said.

Abu Dhabi has about 2 million square meters (21.5 million square feet) of total office stock, and an additional 1.2 million square meters will come on the market by the end of 2012, Jones Lang said.

In Dubai, about 240,000 square meters (2.58 million square feet) of commercial space became available in areas such as Al Barsha, Tecom C and Jumeirah Lakes Towers, Matthew Green, head of United Arab Emirates research at CBRE, said in a report today.

Rates at the Dubai International Financial Centre, a tax- free hub that’s home to hundreds of companies, dropped by 7.5% to AED3,982 (US$1,084) a square meter when offered by DIFC authority and AED2,690 to 3,014 dirhams when offered by private developers, according to CBRE.

MIDDLE EAST BUSINESS COMMENT & ANALYSIS

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