Dubai, UAE: Increasing supply of new Grade A supply at Dubai Trade Centre District and Dubai Design District, along with the stock at Business Bay has pushed down rents in prime office districts in Dubai.
A report by Core Savills issued recently said Dubai has around 90 million sq ft of office stock, 30 percent of which is prime.
Downtown and Sheikh Zayed Road saw a 6 percent drop in office rents in Q2 2016. DIFC retained its position as a top performing location where prices fell 3 percent only. JLT saw a drop of 10 percent in rentals while Tecom saw a 10 percent rise. Tecom’s performance was driven by occupancy reported to be higher than 90 percent. Deira and Bur Dubai saw 4 percent and 5 percent rises in rents respectively, while Dubai Healthcare City witnessed a marginal rental rise of 2 percent. Business Bay witnessed a 3 percent drop where office occupancy levels are at 60 percent.
Around 7.3 million sq ft of additional supply is expected to come online by 2018, the report does not anticipate an immediate revival in sales prices in the near term.