Rising demand in the concrete jungle
Good quality office accommodation attracting increase in rental growth.
July 29, 2013 3:19 by Haifa Badi Uz Zaman
The improving state of the office market in Dubai is visible in the new leasing enquiries and live requirements witnessed by the sector.
A recent market review discusses the rising demand for office space by firms seeking expansion. Mat Green, head of Research and Consultancy UAE, CBRE Middle East says, “The majority of these enquiries have been generated by firms seeking expansion or consolidation space, with a number of major international corporate [companies] seeking new headquarters in prime locations.”
He also stated that good quality office accommodation in JLT, Business Bay and Tecom, are attracting a 6 per cent increase in rental growth. Full building occupancy is also expected in the second quarter of the year.
Similarly, the residential sector is also experiencing widespread growth. The Dubai Land Department reported residential transactions worth AED28.8 billion during the first half of 2013.
Dubai Marina, Emirates Living, Palm Jumeirah and Downtown Dubai are the most dominant residential locations in the sales market. Average residential rentals grew by over 30 per cent over the past 12 months, with half-yearly figures reaching 14 per cent.
The comparative affordability of secondary locations, such as Jumeirah Village and Dubai Sports City have made them popular as first-class options for tenants, leading to an increase in rents. Green claims that the rising residential rents in Dubai are causing residents to downsize or relocate to more affordable areas.
Improved infrastructure, complementary facilities and the availability of retail centres are the main factors that are strongly contributing to rental growth in these secondary locations.