Office rental rates in Dubai have recorded a quarterly decline of 5%.
There has been a noticeable rise in demand for compact (circa. 100 – 500 sq.ft.) fully furnished / serviced offices for lease, especially in areas with a large amount of strata title space, such as Business Bay and Jumeirah Lake Towers. Incentives offered include flexible payment options, free licenses, rent-free periods, zero commission, free chiller and free parking.
Despite the attractive discounts offered by commercial landlords, a reduced number of new leases and renewals are expected as tenants play safe with a wait and watch approach.
Whilst average office rental rates decreased by 2% over the quarter, some low-quality buildings recorded annual drops of up to 15%.
Demand for office space is expected to be particularly hard-hit over the short to medium term.
Limited business/employment growth, job losses and salary cuts would continue to put pressure on the real estate market.
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Information Credits: Asteco