|Arabian Post Staff|Dubai continues to generate strong demand for premium office space according to new data released by global real estate consultancy firm CBRE. Total office stock in the emirate stood at 9.21 million sqm of gross leasable area (GLA) in the first half of 2018. This represents a 14% rise from levels recorded during the same period in 2014. Recent completions in the market further highlight the increased focus on Grade A office space – a trend which is likely to continue with the expected delivery of 1.1 million sqm of new GLA between Q3 2018 and 2020.
Predictably, the number one location for future supply is Dubai South, representing 14% of overall future supply. This is largely due to its close proximity to the site of Expo 2020, which is expected to attract 25 million visitors to the region over a six-month period. Other key locations include Sheikh Zayed Road (11%), Barsha Heights / Dubai Media City (12%), Dubai Silicon Oasis (10%) and DIFC (8%).
According to CBRE data, average occupancy levels for prime office space across the emirate are estimated at 90%. The number of strata-owned buildings has decreased from 73% of total supply in 2014 to 36% this year.
“These figures highlight the continued demand for single-owned buildings, particularly those located in prime locations. The trend towards high-quality offices with amenities that incorporate sustainability and energy efficiency, whilst promoting wellness in the workplace, remains strong. We also see a growing trend towards tenants willing to sign longer term leases in excess of five years to secure quality space,” commented Simon Townsend, Head of Strategic Advisory, CBRE Middle East.
The recent landmark law that enables 100% foreign ownership of companies in the UAE is also expected to have a significant impact on the commercial property market; and, this trend is likely to continue in the aftermath of Expo 2020 which will further enhance the attractiveness of Dubai as a regional and global business hub to the rest of the world.
“We expect the demand for premium office space to continue as more larger corporates consolidate their offices and free zone companies look to operate outside of their free zone boundaries following the introduction of dual licensing,” Townsend continued.
According to figures released by CBRE, total residential stock in Dubai stood at 516,000 residential units as of H1 2018. Over the past 5 years, an average of 20,000 units have been delivered per year. And, this is set to continue at an increasing pace as Expo 2020 approaches.
Growth momentum remains strong with approximately 130,000 new residential units currently under construction – and potentially scheduled to enter the market from 2018-2020. The top five locations for future supply include Dubailand, Mohamed Bin Rashid City, Dubai Creek Harbor, Jumeriah Village Circle/Triangle and Dubai South. It is, however, unlikely that all of these projects will complete on time as historically, the market witnessed supply delays due to a change in market trends or slower than expected absorption as the delivery dates may be adjusted and some of these projects may enter the market slightly later than originally planned.
Townsend said: “Whilst the downward trend in residential sale prices has continued in the first half of 2018, it has not dented the spirit of developers who are continuing to offer advantageous payment plans and incentives. As a result, the emirate’s residential market has witnessed a growth in transaction values and volumes, whilst a large number of new and first-time buyers are purchasing property in Dubai who, previously, found access to properties within the budget ranges sought not always available or suitable.”
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