(DUBAI) Office rents in Dubai dropped by as much as 17 per cent in the second quarter as new supply put pressure on landlords, CB Richard Ellis Group Inc (CBRE) said.
About 240,000 square metres of commercial space became available in areas such as Al Barsha, Tecom C and Jumeirah Lakes Towers, Matthew Green, head of United Arab Emirates research at CBRE, said in a report yesterday.
Rates at the Dubai International Financial Centre (DIFC), a tax-free hub that's home to hundreds of companies, dropped by 7.5 per cent to 3,982 dirhams (S$1,481) a square metre when offered by DIFC authority and 2,690 dirhams to 3,014 dirhams when offered by private developers, according to CBRE.
Companies in Dubai have shed thousands of jobs since the onset of the global credit crisis, increasing office vacancy rates.
Available commercial space is set to increase by almost 80 per cent by the end of 2011, Colliers CRE plc said in May.
Dubai's economy shrank 2.5 per cent last year, according to preliminary government estimates.
Power delays are pushing back the completion of construction in the Business Bay development, reducing the amount of office space coming onto the market in the second half, according to CBRE.
Office supply is increasing by about 5 per cent per quarter in Dubai, mainly in areas including Port Saeed, Al Mamzar, Airport Road and Diyafa Street, according to CBRE.
The value of leases has dropped by 60 per cent since the mid-2008 peak, while prices slumped by 57 per cent and occupancy dropped to about 71 per cent from 90 per cent, according to property researcher Colliers International.
The total space available will rise to about 6.4 million square metres from about 3.6 million square metres at the end of 2009. -- Bloomberg
Source: Business Times, 29 Jul 2010