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In the next 12 to 18 months, office rentals in Dubai will remain stable, but not all-over the emirate. Read where to rent an office in Dubai.
In its latest report Core Savills consultancy expressed an opinion that office rentals in Dubai secondary market are unlikely to increase in the next 12 to 18 months.
Despite a significant increase in demand, the cost of renting offices in developed and old areas of Dubai, such as , (former Tecom), and Old Dubai, is maintained at the same level, mainly due to the large number of new offers entering the market, Core Savills report said.
However, this is true only in regard to Grade B and C offices. Out of a total of 94 million square feet of office space in Dubai, 71 percent or 67 million square feet are estimated to be of Grade B and C quality. Over the past five years, many new office rental offers have appeared in this segment of Dubai’s real estate market, though the absorption of such a large number of new offices by the market remains at the low level, and the average occupancy rate won’t exceed 70% in total. According to Core Savills, it will take at least 1.5 years for all these offers to be demanded.
But, this is not the case with high-quality new Grade A offices. In this category demand constantly exceeds supply, and this trend is expected to continue throughout 2017 -2019. According to David Godchaux, chief executive officer at Core Savills, Dubai developers, and especially those delivering office buildings in free zones, have finally realized the need for Grade A offices and are trying to fill this gap. The bigger part of the most demanded new Grade A offices are being built in such Dubai free zones and areas as DAFZA, Dubai Design District (D3), and . Naturally, units of increased demand usually see prices increasing proportionately, thus rentals growth for Grade A offices is quite likely in the near future.
