By Elsa Baxter
Broker firm says the emirate's construction boom has outpaced demand for offices.
About 40 percent of Dubai’s office space is lying empty after the emirate’s construction boom outpaced demand, broker Knight Frank LLP has said.
Empty office space totals 10 million sq ft (929,030 sq m) in Dubai, the firm said in a note on Monday, reported by Bloomberg news agency.
The vacancy rate for office space in the UAE capital Abu Dhabi is six percent, the broker said.
Last month, Jones Lang Lasalle estimated that demand for commercial space in Dubai was about 1.5 million sq ft – much less than the 10 million sq ft of current available space.
The real estate specialist said at the time that demand for office space had increased over the past six months this year as businesses snapped up bargains.
Most of the demand was for units less than 20,000 sq ft, the firm noted.
At the same time, Nomura said the UAE needed to create at least 150,000 white-collar jobs to absorb the amount of commercial real estate expected to hit the market in the next two years.
The investment bank said Dubai needs to create 100,000 jobs and Abu Dhabi 50,000 to satisfy the future supply of commercial real estate.
Commercial real estate space in Dubai is expected to increase by 20 million sq ft while the Abu Dhabi market could add another 10 million sq ft, the bank said.
Read a while back that there was more office space planned for Dubai (pop. ~2M) than Shanghai (pop. ~20M), so we shouldnt be to surprised when we discover that there's a whole lot of empty offices.
..and here lies the problem - uncontrolled borrowing for a property market based on pure speculation. I suppose the rose tinted specs boys will be saying this is someone else's fault as well?