UAE ‘attractive option’ with falling rents
Dubai, March 29, 2011
As rents continue to fall, the UAE is once again becoming an affordable and attractive option for companies wishing to service the wider Middle East marketplace, said a report.
Continued uncertainties elsewhere in the region only serve to further underline the level of stability that has been achieved in the Emirates, which, along with the quality of completed infrastructure, make it a major contender for any international corporate looking to set up base in this region, said latest Global Office Market View from CB Richard Ellis (CBRE), a US-based firm offering a full range of property services.
The main characteristic of the Dubai market has been a continuing decline in rents, but in turn this has triggered more transactions both in the size and number of deals, said the report.
The publication of a new “rent matrix” in Dubai International Financial Centre (DIFC) can generate savings for occupiers willing to commit to the new DIFC lease form and allows for greater transparency in doing business there, it added.
“Demand is being led by the financial and professional services sector and continues to focus on single landlord-owned buildings,” explained Mat Green, head of research & consultancy, UAE for CBRE Middle East.
For existing Dubai tenants the key trends have been towards reducing operational costs, flight to quality and greater lease security.
Elongated terms of between 5 and 10 years are now becoming more prevalent as both landlords and tenants seek to reduce their risk exposure.
“With rental rates now becoming so much more attractive we are seeing an increasing number of occupiers looking to relocate back to the business district, exploiting favourable conditions to secure high quality office accommodation for extended periods at a fraction of rents once demanded,” Green explained.
In Abu Dhabi, the first batch of the long awaited supply of internationally recognizable Grade A office buildings will deliver during the course of 2011, the report said.
Occupiers have been stalling on decision-making due to uncertainties in the international economy and local business development, as well as a lack of suitable offices to move to.
“We are already seeing significant interest from occupiers of all sizes seeking to secure some of the new Grade A office buildings available in 2011, such as International Tower, HQ and Al Sowwah Square,” Green said. – TradeArabia News Service