By Tahani Karrar
New report says over 2.33 million sq ft of office space delivered in emirate so far in 2017
Demand for premium office space in Dubai is continuing to outstrip supply, while Grade B and C office stock are seeing limited supply, according to property services firm Core Savills.
It will take years for existing Grade B and C stock to be completely absorbed and rents are expected to stabilise in 2019, the company added in a new report.
“The good news is that developers are listening to the market, and have significantly slowed the pace of new grade B and C office space,” said Core Savills CEO David Godchaux.
Prime offices are now expected to account for a substantial 71 percent of the total stock expected from 2017 to 2019, finally overtaking Grade B and C deliveries. About 4.4 million sq ft of prime office space will come to the market between 2017 and 2019 and this will negatively impact rents.
"This comes as welcome news for global corporate occupiers, who have sometimes found it difficult to secure the right (prime) office space in the city, despite their willingness to use Dubai and its world class infrastructure as a hub for their MENA operations," Godchaux said.
With regards to location DIFC continues to be the best-performing office district. Dubai Internet City and Media City maintain their strong performance and remain top preferences for institutional investments.
There is also a rise in co-working spaces and business centres which are drawing increasing interest from small businesses and entrepreneurs. Dual licensing free zones such as D3 and One Central are expected to attract occupiers by easing business operations, thereby supporting long-term demand for commercial space.
Retail in office buildings will also gain a stronger foothold as demand rises for fitness centres and ground floor F&B units within commercial districts, the company said.