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Dubai office rents collapse 50% in 9 months |
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Thutrsday July 30 2009
Dubai office rents have collapsed 50 percent in the
last nine months as business activity fell, with residential rates also
tumbling 40 percent, a new report said on Thursday.
Further
drops in commercial and residential rents are likely as Dubai’s
property market faces a three to six month period of continued negative
growth, CB Richard Ellis (CBRE) said in its quarterly UAE Property
Insight report.
Abu Dhabi also saw office rents fall 30 to 40 percent in the last nine months.
But the global property consultancy said price drops are slowing and
predicted the market could bottom out by the end of the year.
Office
stock rose 22 percent year-on-year to the end of June helping push
rents down in secondary locations like Al Barsha from AED3,230m² in Q3
2008 to 1,615m² - a 50 percent drop.
Commercial property
supply continued to outstrip demand. Occupiers are now focusing on
smaller sized units ranging from 95-230²m, compared to 400m² before the
downturn.
Prime rents, however, mainly in DIFC (Dubai International Financial Centre), were stable in the first half of 2009, CBRE said.
High levels of office space will hit the market this year in Business Bay and TECOM, the report added.
CBRE
said the expatriate workforce exodus had caused residential rents to
plunge as well, with vacant apartments emerging in the older districts
of Dubai such as Deira and Karama.
Newer residential areas of
non-freehold locations like Al Barsha were the worst hit, it said, with
a one bedroom apartment available to lease for AED60,000, down from a
high of AED100,000 in Q2 2008 - a 40 percent decline.
Lease and
occupancy rates would come under pressure in new residential
developments of Dubai Silicon Oasis and the International Media
Production Zone, the report added.
Source: Arabian Business
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