By Staff writer
Cluttons says technology-media-telecoms sector is leading expansionary activity amid gov't plan to create world's smartest city
Technology-media-telecoms (TMT) is among the most active commercial real estate sectors in Dubai, spurred by the government’s drive to position the city as the region's leading tech hub.
According to real estate consultancy Cluttons, high levels of expansionary activity have been recorded in the TMT sector over the past six months.
Cluttons’ bi-annual Dubai Office Market Bulletin for Spring 2017 showed that Internet City and Media City remain the core focus of this "rapidly expanding and ever important sector" for Dubai’s economy.
Faisal Durrani, head of research at Cluttons said: “The government’s recent Future-Accelerators Programme is paving the way for further strong expansion in this area over the short term. However, with limited amount of space available in high demand locations, interest is likely to rise in complimentary free-zones such as Dubai Science Park."
His comments come as Samsung has recently trebled its floor space, while Amazon Web Services announced plans to establish a new Middle East office in the emirate as it works to grow its presence in the region.
Durrani added: “While 2016 was broadly punctuated by high levels of consolidation activity, notably from the oil and gas sector, but also existing occupiers looking at efficiencies through single-hub operations, a lot of that activity has all but subsided.”
According to Cluttons, overall activity in Dubai’s office market remains muted. Throughout the course of 2016, 10 of the 23 submarkets monitored registered decreases in upper limit rental rates, with Garhoud ending the year 18.2 percent down while Al Barsha (-10 percent) and Deira (-9.1 percent) were the next weakest performers.
On the other hand, DIFC emerged as the city’s best performer last year, with upper limit rents rising by 5.7 percent.
Murray Strang, head of Cluttons Dubai said: “Looking ahead, The Avenue, DIFC’s retail parade, is expected to spur overall activity and take up across the district. The Avenue is expected to bring increased connectivity as DIFC matures into a more pedestrian friendly environment. For now, core buildings command very low vacancy rates of sub 5 percent and we expect this to persist.
He said the shortage of space in this part of DIFC is hampering activity.
Strang added: “No supply relief is expected until early 2019, when the $1 billion ICD Brookfield Place is expected to complete. The development will provide 900,000 sq ft of Grade A space. Nearby, One Central may offer further significant Grade A space when a further two buildings in phase 2 complete later this year.”For all the latest real estate 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.