Dubai: Sentiments are turning distinctly bullish in Dubai’s commercial office space, with the number of enquiries coming along nicely and rental rates at some of the prime locations gaining in strength, And the recent moves over ending Iran’s sanctions has a lot to do with the upturn.
But industry sources are not expecting things to change overnight. In fact, a good deal of patience is what they counsel.
“It would be very unusual to expect that negotiations involving international occupiers can be wrapped up within nine months or so - 12 to 15 months could be a more achievable timeframe,” said Nicholas Maclean, Managing Director at CBRE M.E. “The larger the transaction (in terms of space being considered, the size of the rental sum finally agreed upon, etc) the longer it is going to take.
“Even if the current enquiries take time to be sealed, the commercial realty is clearly quite some distance removed from what’s happening within residential.
“And even without taking into account what could happen across the water, there is a bullishness about the economy and that new jobs will be created,”
Figure prominently
Any property owner holding sizable office stock in key clusters holds a few of the aces. Business Bay, Shaikh Zayed Road and DIFC figure prominently, with those at DIFC hovering around the Dh250 a square foot mark. These rates are still some way off what they were in 2007-08. But there have been individual properties within it that have set rentals at a higher level, in effect testing the waters.
“Tecom could also be taking in more enquiries if only the zone had more space to spare,” said Maclean. “The free zones in Dubai too have been recording good rental growth and in many ways the ‘market-making’ in the commercial space is being done by them.”
