The UAE’s office market displayed signs of recovery in the fourth quarter of 2021 following several months of muted activity, according to new research.
JLL’s 2021 year-end report said improving demand for good quality office stock combined with relatively limited supply in Dubai’s central business district translated into Grade A rents increasing by 2 percent year-on-year.
On the same basis, Grade A rents in Abu Dhabi also rose by 5 percent, JLL added.
Towards the end of 2021, the UAE saw the introduction of reforms such as a change to the work week from Monday-Friday, aligning with global markets, as well as new labour laws and visa options.
The report said that over the medium to long-term, such initiatives will help bolster the UAE’s competitiveness by attracting and retaining a skilled workforce and making it a more appealing location to live and work.
“The pandemic-induced uncertainty about future business conditions and changes in employee preferences have underpinned a surge in enquiries for flexible space options such as serviced business centres,” said Khawar Khan, head of research for the Middle East, Africa & Turkey region at JLL.
“Occupiers have also expressed interest in good quality fitted office space in an effort to minimise capital expenditure due to constrained budgets.”
In the residential market, a “race for space” and the relative affordability of villas (pictured below) and townhouses during the depths of the pandemic helped to stimulate the strong recovery in sales prices – a trend which extended into Q4.
This was seen in both Dubai and Abu Dhabi, JLL said, adding that waterfront developments in Dubai, as well as villa projects in Abu Dhabi – particularly on Saadiyat Island and Yas Island – experienced solid demand from investors and end-users alike.
According to JLL, the UAE retail market also registered a pick-up in footfall and turnover in Q4, attributed to various factors including the success of the UAE’s vaccination programme which has led to easing restrictions, a resumption of global travel, as well as the start of the Expo event in October.
Due to the uncertain economic climate, retail occupiers continue to push for incentives such as rent-free periods, contribution towards capital expenditure on fit-outs and revenue-share options, the report noted.
“Forecasts show that, in the UAE, the recovery in tourism and rising employment will support healthy consumer spending growth over 2022-23. This in turn should help provide a boost to retail sales – which are anticipated to broadly return to pre-pandemic levels by the end of next year,” said Khan.
Follow us on
