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Dubai office rents down 16pc |
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07.14.2009 |
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With the fallout of the global economic downturn now hitting leasing markets, landlords are under increasing pressure on rents and lease terms, according to the latest reports by a leading commercial real estate service provider.
The latest figures from CB Richard Ellis (CBRE) Office Market View for the first quarter of the year show that the average office rent in Dubai is 995 euros per sq mt ($1,389.2) per annum, the second highest market rate in Europe, Middle East and Africa (EMEA).
Unsurprisingly, London's West End tops the list of the most expensive office rents at 1,019 euros. The other cities that make up the top five are Moscow (third) at 906 euros, Paris (fourth) at 700 euros and St Petersburg (fifth) at 657 euros.
In terms of local currency, the average prime office rate in Dubai is down 18 per cent year-on-year.
The class A office market in Bahrain remains oversupplied but properties in locations which meet key requirements such as access, parking and pricing are letting quickly at rates similar to last year.
Demand from the banking sector, a major driver of the commercial office market, is likely to have weakened recently, affecting overall demand for office space.
In the UAE, active demand has weakened considerably since the turn of the year, and relatively high levels of new supply are coming on-stream throughout Dubai. Rental levels have softened across the board but most particularly in strata-title office buildings in areas such as Jumeirah Lake Towers.
Occupiers in older office buildings or residential conversions in Abu Dhabi are increasingly withdrawing from pre-commitments to new grade A space because of the economic uncertainties, the report says.
The gap between existing and projected occupational costs is not sufficient to drive relocations until the asking rents for these new-builds are reduced further.
Despite the much publicised downturn in the Dubai market, prime office rental rates remain comparatively high and second only to London's West End,' said CB Richard Ellis Middle East associate director of research Matthew Green.
'However, with a significant portion of supply still to enter the market this year we are likely to see further rental reductions as landlords compete to secure tenants,”
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Source:www.tradearabia.com |
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