Wednesday 12 June 2019
Increased supply is driving Dubai’s office rents lower in the first quarter of 2019, according to research released by real estate consultancy Knight Frank.
Firms are not willing to relocate to secondary locations and Grade A office locations still remain most desirable.
Average office rents fell by 4.3 percent in the first three months of the year, with the quarter-on-quarter decline increasing from 1.2 percent in Q4-2018 to 2.1 percent in Q1-2019.
Grade A rents, which eased 5.1 percent in 2018, have seen the rate of decline moderate with rents falling by 3.3 percent by Q1-2019.
Dubai’s GDP grew by 1.9 percent in 2018 with three out of the five largest sectors seeing their annual rate of growth increase. The Emirates NBD Dubai Economy Tracker Index (DET) recorded a reading of 57.6 in March 2019, the highest reading since May 2018. As this is above the neutral 50 level it indicates a relatively strong expansion in the non-oil sector.
Firms are optimistic about the coming year with 75 percent of those surveyed expecting output to be higher in a year’s time. The outlook for Dubai’s GDP remains positive with growth in 2019 expected to strengthen to 3.6 percent and to 4.2 percent in 2020.