Office rental rates have recorded an average decline of 12% compared to the previous year. Barsha Heights and Sheikh Zayed Road have a common decline rate of 20%.
Although 2019 was 9% more than the market low, increasing supply and decreasing demand are suspected to drive the rates below the aforementioned level.
Bur Dubai, Business Bay, DIFC and Jumeirah Lakes Towers have recorded an average annual decline of 8%, 13%, 12% and 16% respectively.
Additionally, economic uncertainties limit newcomers to the market and are expected to put further pressure on office rental rates.
There is an annual drop of 6% in the rental rates of prime commercial office spaces. Several Grade B commercial buildings, however, recorded decreases of 8% to 10%.
Additional supply in the face of limited demand is poised to bring down office rental rates. 2019 had the lowest rates (since the market low in 2012), and the downward trend is expected to continue.
Commercial landlords will continue to offer incentives, discounted rates and flexible payment options to increase demand and match the supply.
Information Credits: Asteco