Weakened demand and increased supply are pushing office rents in Dubai lower in the first quarter of 2019, according to new research.
Knight Frank said average office rents fell by 4.3 percent in the year to March, with the quarter-on-quarter percentage decline increasing from 1.2 percent in Q4 2018 to 2.1 percent in Q1.
Despite tougher trading conditions, firms are not willing to relocate to secondary locations in order to reduce costs, prime and Grade A office locations still remain most desirable, the real estate consultancy said in a report.
It added that average rents in the prime sector of the market in Dubai stood at AED240 sq ft per year, down 3.6 percent compared to the year-earlier period.
Grade A rents, which fell 5.1 percent in 2018, have seen the rate of decline moderate with rents falling by 3.3 percent in the year to Q1.
Matthew Dadd, partner at Knight Frank Middle East, Occupier Services and Commercial Agency said: “Given the current subdued conditions, landlords are actively offering favourable terms to new and existing occupiers.
"Rent free incentives, both to existing and new tenants, are being a more common practice, in order to maintain and attract key corporate occupiers within their portfolios.”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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