By Sam Bridge
A continued lack of demand and drive from occupiers to lower costs has seen Dubai office rental rates fall
A continued lack of demand and drive from occupiers to lower costs has seen Dubai office rental rates fall on average by 8.4 percent in the year to the end of September, according to new research.
Knight Frank said Grade A rents in Dubai previously witnessed a period of moderation in rental drops in the year to Q2 but the rate of decline increase to 5.9 percent in Q3.
Citywide office rents fell by 9.2 percent in the 12 months to September to AED110 per sq ft per year.
Knight Frank said the figures come as business confidence in Dubai has eased in the first two quarters of 2019, following the slowdown registered in Dubai’s GDP growth, where GDP grew by 1.9 percent in 2019, down from 3.1 percent a year earlier.
It added that the vast majority of activity in the Dubai office occupier market continues to stem from firms consolidating, with activity from new incoming occupiers remaining very limited in the first three quarters of 2019.
Matthew Dadd, partner at Knight Frank Middle East, Occupier Services and Commercial Agency said: “With the premium between entry level prime office space and average Grade A buildings closing, firms are much more open to considering relocating in Dubai to Prime office buildings. Particularly as prime office space offers dual licencing, something which not all Grade A office space offers.”
Despite a challenging economic backdrop, data from the Ministry of Human Resources and Emiratisation showed that Dubai has added 90,304 net new jobs in the year to June compared to 74,108 in the same period a year earlier, representing a 21.9 percent increase.