Dubai office vacancies at 25pc
Approximately a quarter of office space in the emirate is empty, although the percentage is expected to rise due...
August 25, 2009 1:46 by Dana El Baltaji
Approximately a quarter of office space in the emirate is empty, although the percentage is expected to rise due to an influx of office units in 2009, according to a report from property consultancy Jones Lang Lasalle.
The report entitled The Dubai Office Market Snapshot claims an additional 2 million square feet of office space is expected to flood the market. As for June 2009, Dubai has about 33.6 million square feet.
“Vacancy rates are hovering between 22 percent and 25 percent and are expected to increase further over the next 6 months as new supply continues to be released,” said the report.
Office rents in the second quarter of 2009 fell 25 percent, compared with an average 45 percent drop in the previous quarter.
“The global economic downturn has certainly been a major factor in reducing the level of demand as many tenants have either downsized, delayed their expansion plans or wait to see where rents may settle,” said Matthew Hammond, Head of Agency at Jones Lang Lasalle MENA.
Annual rents for high-end office spaces in today’s market average AED225 per square foot, which is on par with rates seen in 2007.