By Staff writer
New JLL report says a total of 5,400 residential units were completed in Q3, with apartments making up 63%
The number of new residentials units completed in Dubai in the third quarter of 2016 rose to the highest level since Q4 2012, according to a new report by consultants JLL.
The last quarter saw the completion of 5,400 residential units with apartments comprising the majority (63 percent) of total completions.
The report said Dubai's supply pipeline remains active, with a further 11,000 units scheduled to enter the market in the final quarter of 2016, although not all of these projects are likely to be delivered on schedule.
JLL said the third quarter also saw the delivery of 51,000 square metres of office gross leasable area (GLA).
The total office stock in Dubai has now risen to around 8.6 million square metres, with an additional 152,000 square metres scheduled to be delivered in Q4, almost three times that delivered during Q3.
The report said Business Bay continues to be the focus for completions, with projects also expected to complete in Silicon Oasis, the Greens and TECOM.
The trend seen in Q3 showed a move towards smaller offices with few large transaction during the quarter, a result of the measures occupiers are taking to be cautious in the face of more challenging economic conditions in the region, where a number of firms are reviewing their staffing and space requirements, the report added.
“This reflects occupiers’ caution in the face of more challenging economic conditions in both Dubai and across the broader region,” said Craig Plumb, head of research, JLL MENA. “While there remains strong demand for smaller units, it is taking far longer to negotiate larger deals as companies remain uncertain about their staffing and space requirements.”
JLL's quarterly report noted the “muted market conditions” that characterised Cityscape Global 2016.
“What we’ve seen at Cityscape Global 2016 reflects the subdued condition of the real estate market right now,” said Plumb. “We’ve seen a lot of projects being re-announced and fewer new projects being launched compared with previous years. While short term sentiment remains soft, most developers and investors are expecting conditions to improve over the medium term, with an increase in activity anticipated in the lead up to Expo 2020.
“Due to the changing economic climate in the region, investors are looking for ways to diversify their portfolio which have led them to look into alternative investment opportunities. This was one of the trending topics during Cityscape with the education sector leading the way.”