The UAE’s commercial property sector is back into the reckoning with growing interest from global occupier and investment segments, according to the Royal Institution of Chartered Surveyors (Rics).
In its new report, ‘Global Commercial Property Survey’, Rics said: “Further improvements in sentiment in both the occupier and investment segments of UAE real estate market show that the tone in the property industry is continuing to gain ground, reversing the negative pattern that characterised the market from the back end of 2009 through till the middle of last year.”
The UAE market topped the Rics Occupier Sentiment Index and is second in the Rics Investment Sentiment Index. These indices are designed to chart how sentiment in various countries has changed compared with the previous three-month period.
Simon Rubinsohn, Rics Chief Economist, said: “The latest numbers demonstrate that the recovery story is continuing to gain traction in both the UAE and Japan and that real estate markets across much of Asia and in the US remain generally positive.”
In January, Jones Lang LaSalle, a global property consultancy, had predicted prime office rents to rise for the first time since 2008.
Department of Economic Development (DED) in Dubai said on Tuesday that improvements in the ease of doing business are bringing growth into focus as 74 per cent of the respondents in its survey stating they would invest in expansion compared to 30 per cent in Q2 2012 with the business outlook for Q3 2013 remaining steady.
In its Q2 report on Dubai real estate market, it said average headline quoting rents in quality office buildings in selected areas had risen by 8 per cent in second quarter compared to first quarter 2013.
The top prime rent improved to Dh2,600 per square metre in the Dubai International Financial Centre, while it increased to Dh1,722 per sqm elsewhere in the central business district (CBD). Outside the CBD, prime rent reached Dh1,685 per sqm in Q2 2013.
“Flight to quality”, however, remained a trend, with occupiers relocating out of the older areas to buildings in newer areas such as Business Bay, Downtown, Jumeirah Lakes Towers or Jebel Ali.
The current office stock in Dubai stands at 7.2 million square metre with an additional 1.4 million square metre space being delivered in the next two years. Vacancy rates for single ownership buildings in CBD stood at 31 per cent in the second quarter, JLL said.-Emirates 24/7