August 23rd, 2016 by Own A Space
Dubai’s office space landlords are willing to offer rent free periods instead of lowering the rents beyond a certain limit to attract the tenants, according to a real estate consultancy.
It said on the second quarter that in the short term, the general rental growth lack is not likely to change. It is not expected from across a market as a whole for rents to decrease further, especially when they are considered to be of fair market value and the landlords deny leasing below a particular level.
Picture Courtesy: www.westchestermagazine.com
They also said that the landlords have offered add on incentives like rent free periods and fit out contributions so that the tenants stay attracted. Stating this, before any signs of uplift, minimal rental change for 6-9 months is expected.
In the second quarter of 2016, there was a consistency in the rents along with the declines measured in 6 out of 22 submarkets such as Garhoud (18%), Al Barsha(10%) and Deira(5%).
A few submarkets recorded minor uplifts in upper limit rents involving Dubai International Financial Centre (6%) and the wider Tecom submarket (7%). As per the consultancy these are the exceptions as there was no recorded movement in lower or upper limit rents in 14 submarkets.
Picture Courtesy: www.propertymindre.com
Schemes like flagship, signature and prime as for Burjman Business Tower administer rents of Dh 12910 per sq. metre (psm) over the average of Dh 120 psf in Bur Dubai area. Emirates tower in Sheikh Zayed Road is a popular one with low vacancy rates. Rentals range from Dh 1,292 to Dh 3,014 psm.
Top and central areas of free zones of Dubai Internet City, low vacancy rates of Dubai Media City and Knowledge Village, DIFC and Dubai Design District of around 5% as compared to Sheikh Zayed Road (Trade Centre) submarket which has stock of mixed quality and age also vacancy rates close to 20%, the consultancy disclosed.
JLL, a real estate consultancy said that demand for the central business district (CBD), the area from the World Trade Centre periphrastic to Downtown exists and is quite evident keeping in mind the relatively high rentals, right now averaging at Dh 1,922 per square meter and the low vacancy levels.
Picture Courtesy: www.arabianbusiness.com
A declining trend has been noticed in vacancy rates within commercial office towers in CBD which suggests that there might be a lack of office spaces and hence a number of built-to-suit projects and prerelease agreements scheduled to be completed, according to the consultancy.
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