Office lease remains to escalate in Dubai

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Office lease in Dubai remains to rise in tandem with a robust rental increase in residential area on the back of an optimistic economy and developing business buoyancy.

Office lease remains to escalate in Dubai

Office lease remains to escalate in Dubai

Standard prime Central Business District (CBD) rents rose with 3% quarter-on-quarter and 25% annual in the second quarter 2014, according to A report.

It was reported that the average of Dh1,884 per square metre yearly. This is anticipated to boost further within the short term among strong economic development and mounting trade and industry confidence.

The escalation in lease is regardless of the sustained important development in office stock with over 1.8 million square metres set to be conveyed by the end of 2017.

Secondary office sites remain to see an enriching performance with average rents rising from Dh924/sqm per year to Dh1,148/sqm per year in second quarter of 2014. This reflects growth of 24% in just a year with a 5% rental increase recorded during the quarter.

With limited availability of good quality office accommodation in prime areas, we can expect to see demand spillover into some secondary locations, particularly for single owned properties in close proximity to transport links.

Simultaneous with the office leas rise, Dubai’s residential area remains to encounter resilient demand from both transactional and occupation sources.  The complete Dubai Residential Price Index is proving rental upsurge of almost 20% over the last year, with apartments registering an escalation of 21% whereas villa rentals have increased by almost 10%.

In current report, it was said that despite of the residential area saw prices and rents soar across most zones, the rate of development has begun to slow from that seen earlier in the year. The average sale prices increased by 6% in the second quarter down from 10% in the previous quarter.

In the office part as continued economic development has enhanced response and created demand for commercial area, the high level of both recent vacancy and upcoming supply remain to constrain the marketplace.

Mohamed Dekkak