Office rents in Dubai are the second highest in the EMEA region, behind London's West End, a new report found on Tuesday.
At $1388 per sq metre, the emirate's office market has been resilient amid the fallout from the global crisis, ranking behind London's in-demand West End where average office rents were $1421 per sq metre, property adviser CB Richard Ellis (CBRE) said in its EMEA (Europe, Middle East and Africa) Office MarketView Q1 2009 report.
Moscow, Paris and St Petersburg were found to have the next three strongest office markets in the region, the report showed.
However, with increased supply entering the Dubai market this year, the report predicted that rents will continue to fall as landlords compete to secure tenants and demand weakens in the wake of the economic downturn.
Average prime office rates fell by 18.2 percent in the last three months, the report said.
Rents have already dropped "across the board" in Dubai - particularly in office buildings in TECOM and Jumeirah Lake Towers, CBRE said.
In Abu Dhabi, occupiers were pulling back from commitments to new Grade A space because of uncertainty over the economy, the report added.
The office market in Bahrain is oversupplied, with demand from the banking sector - a major driver of commercial property market - likely to have weakened.
Richard Holberton, director of EMEA research at CBRE, said: "Landlords are finding it increasingly difficult to lease vacant space, given the understandable caution being expressed by most occupiers at present.
"With those occupiers requiring space driving a hard bargain, and increasing choice available in the market, it is inevitable that we will see further weakening in rents and an increase in leasing incentives in most markets over the coming months," he added.For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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