Some commercial property project planned for Dubai may be delayed or scaled back owing to volatile global markets and geopolitical conditions, according to a new report.
JLL’s Q3 2017 Dubai Real Estate Market Overview report said growth plans of corporates in the emirate face "some risk" despite another 35,000 sq m of office space being added during the third quarter of 2017.
"JLL believes there is some risk with the materialisation of certain projects owing to volatile global markets and geopolitical conditions, which may result in corporates delaying or scaling back future growth plans," the consultancy said in the report.
It added that another trend noticed recently is the increase in sublease space in Dubai, with tenants seeking to sublease surplus space resulting from previous more ambitious expansion plans.
JLL said office rents have softened across Grade A quality buildings.
It added that favourable renewal terms are being presented to retain tenants throughout the central business district, in the face of increased competition from the next generation of ‘best in class’ projects such as ICD Brookfield Place.
"We believe these soft market conditions will continue into Q4, as landlords compete for fewer requirements, particularly when coupled with the considerable new supply that is coming on line in projects such as One Central," the report noted.
JLL said office vacancies within the central business district have remained largely stable over the past quarter at around 8 percent.
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