Office rents stabilise in parts of Dubai

Office rents in Dubai Silicon Oasis, Bur Dubai and Deira may have bottomed out as these areas in the city have not seen any major rent reduction in the past month, said property analysts.

"If you look at these three areas we have seen only a marginal reduction of one-two per cent in July-August and this suggests that office rents in these area have probably bottomed-out," Porush Jhunjhunwala, Manager, Commercial Leasing at real estate firm Better Homes told Emirates Business.

"On the other hand, areas such as Al Quoz, Jumeirah Lake Towers, Ghusais and Tecom may see another five to 10 per cent correction before rents stabilise there," he added.

According to David Macadam, Director – Sales and Leasing Commercial at Better Homes: "the current office vacancy for leasing availability is approximately 15.5 per cent. Generally, commercial lease rates have fallen from 40 per cent to 60 per cent depending on the size of the office premises, grade of the building, access, parking availability and location of the office building."

Macadam said, "Our office leasing transactions are now levelling off in the range of Dh80 to Dh150 per square foot per year as a lease rate. We have not seen any decline below these rates."

The latest data from Better Homes show that Dubai Silicon Oasis has seen the maximum (65 per cent) reduction in office rents as compared to January of this year. The current office rentals in the area are between Dh50 and Dh70 per sq ft. Barsha and Dubai International Airport have seen a decline of more than 55 per cent in office space.

Currently, Barsha office rent rates are between Dh80 and Dh120 per sq ft and for Dubai International Airport Office it is about Dh90-120 per sq ft .

Deira (Dh75-110/sq ft), Garhoud (Dh80-110/sq ft), Sheikh Zayed Road (Dh110-170/sq ft) and Umm Hurair (Dh90-120/sq ft) have seen a 55 per cent decline since the beginning of this year. Karama (Dh90-120/sq ft) and Qusais (Dh80-110/sq ft) have seen a dip of a little more than 50 per cent.

Bur Dubai (Dh90-115/sq ft) is down by 50 per cent, Dubai Investment Park (Dh70-85/sq ft) and Jumeirah Lake Towers (Dh55-120/sq ft) are 47-48 per cent down from their January levels. This is followed by Downtown Burj Dubai (Dh170-200/sq ft), with 46 per cent reduction and Al Quoz (Dh75-90/sq ft) with 41 per cent drop.

The least affected have been Dubai Health Care City (Dh115-145/sq ft), which is down by a little more than 35 per cent.

Keep up with the latest business news from the region with the daily Emirates Business 24|7 newsletter. To subscribe to the newsletter, please click here

Follow Emirates 24|7 on Google News.