The Dubai Office Market Q1 2016 report revealed much of that growth is expected to occur in the Business Bay area of the emirate.
It said: “The growth in supply is likely to be most significant in Business Bay over the next few years as the area seeks to establish itself as one of Dubai’s premier business districts. Given the rapid growth in supply, office sector sales prices in this area remain under slight downward pressure, at least for the moment.”
By the end of 2015, Dubai’s office market supply reached an estimated 8.4 million square metres, of which, around 2.4 million square metres (28%) is located in the prime areas of DIFC, Downtown Dubai, Sheikh Zayed Road (Trade Centre to First Interchange), Dubai Internet City and Dubai Media City, while the bulk of total supply (4.2 million square metres – 51%) is in secondary office locations such as Business Bay, Deira, Bur Dubai, Dubai Healthcare City, Tecom C and Jumeirah Lakes Towers.
Despite the global economic downturn, prime and secondary stock growth was “extremely rapid” in the five years until 2011, but moderated to 7%, 3% and 5% in 2012, 2013 and 2014 respectively.
Prime and secondary supply growth fell further in 2015 to around 5% with notable additions in Deira, DIFC and Tecom, although Business Bay saw the bulk of secondary office space completions, with approximately 318,000 square metres of new stock in 2015.
Core UAE CEO, David Godchaux, said: “2015 was an interesting transition year where, on the back of overall softening demand for office space in the UAE, prime properties significantly outperformed the average market in terms of rental rates and occupancy levels.
“We expect this trend to continue over the next few years with relatively strong underlying demand for quality office space that is currently not being fully met. This has resulted in a widening gap on rate and occupancies between prime and Grade B offices.”
About Core, UAE Associate of Savills
As one of the largest UAE property services firms, Core Real Estate, the Savills associate, combines unrivalled local market insight with the international strength provided by 600 global offices.
As a full-service real estate business, working with occupiers, investors and developers of residential and commercial real estate in Dubai and Abu Dhabi, we provide integrated expertise across all property sectors, including: offices, prime residential, international residential, retail, hotels and industrial logistics.
Website : www.core-me.com