The first quarter of 2015 witnessed stability in office rents in Dubai’s prime and secondary markets, while the industrial market maintained its momentum and growth, a recent report reveals.
This came after a slowdown in the rate of the increase in rents during Q4 2014, according to a report issued by the property consultants, Cluttons, reports Al Arabiya.
Cluttons’ Spring 2015 Dubai Commercial Property Outlook report shows stability in the growth of office rents, in spite of continued strong demand.
Grade A office rents increased by 14 per cent in 2014, while the secondary office space saw the largest increase, estimated at 24 per cent last year.
However, this strong growth could not be sustained for long because rents have broadly stabilized, despite a steady stream of demand from companies.
In the secondary market, rents were affected by the abundance of stock, which continues to trickle through in locations such as Jumeirah Lake Towers and Business Bay.
Despite the demand for Grade A space remaining diverse and strong, the average rents stabilised.
Steve Morgan, chief executive at Cluttons Middle East, says, “The range of requirements filtering through between 2,000 and 25,000 sq ft, underscoring the diversity of business activity.”
The finance and banking, real estate and business services sectors have been especially active in recent months, with both existing and new market entrants seeking out space.
“Our experience has also been reflected in the results of the latest Dubai Economic Department Business Confidence Survey, where 69% of responding businesses have indicated that they will invest in capacity expansion over the next 12 months.
The outlook for business remains very upbeat, with over two-thirds of businesses expecting a rise in their level of trading, while 26% expect to increase their head count over the year,” Morgan adds.