By Staff writer
JLL report says Dubai International Financial Centre is the top performer in region over the past year
Rents on prime office assets across the MENA region continued to see double-digit growth in the year to the end of June, according to JLL.
Average rents rose by 11.3 percent per annum compared to 11.9 percent per annum in the year to the end of the first quarter of 2016.
JLL's Office Global Index Report ranked Dubai as the region's top performer over the year with a growth of 20 percent reported in Dubai International Financial Centre (DIFC) followed by Cairo at 16.7 percent.
"Office demand is proving resilient in many of the world's dominant commercial real estate markets despite increased political and economic uncertainty which is leading to corporate occupiers striking a more cautious tone," said Jeremy Kelly, director in Global Research Programmes, JLL.
"Underlying market fundamentals are sound, and corporate demand remains strong, notably in Dubai as office vacancy rates continue to decline in the DIFC. As a result, we have witnessed a boost in rental values within the DIFC unlike other locations where rental values have remained largely unchanged."
In terms of overall performance and demand in Q2 for Dubai, the Central Business District (CBD) remained popular, with rental rates averaging at around AED1,922 per square metre.
The report said Dubai and Cairo have manoeuvred well through the political and economic storms of 2016 with Brexit being a potential unbalancing element in Q2.
While some markets have struggled to maintain a positive momentum, many have remained remarkably robust and continue to expand, said JLL.
Looking towards the second half of the year, JLL said prime rents are mainly projected to remain stable in MENA as new supply continues to enter the markets.
"In Dubai, rental growth is predicted to move into further positive territory during the second half of the year, and low vacancy rates coupled with little interest in occupying alternative space will continue to prevent substantial fall in rents," added Kelly.