Increased demand for commercial space has driven office rents in prime locations up by 10 to 15 per cent over the past six months, although other “submarkets” continue to struggle to attract tenants, real estate specialist Cluttons announced yesterday.
The uptick in demand is likely to revive stalled development projects in some areas in Dubai.
Cluttons also reported that due to high wealth levels and consumer confidence there is a “considerable activity” in the retail sector, with malls reporting increased footfall and sales, and community retail spaces posting rent increases of 12 to 15 per cent year-on-year.
Clutton’s report said office rent rose in areas once hit by the property fall in 2008, including Jumeirah Lakes Towers, Tecom C, Al Barsha and Business Bay, where rents had previously nosedived by as much as 50 per cent. “JLT and Business Bay, in particular, have seen a significant improvement in both inquiry levels, take-up of space and rising rental levels,” Cluttons said in its report.
Rates in Prime Grade A locations remain “competitive”, prompting some landlords to split units into smaller floorplates and fitting out space to draw tenants.
Rents at prime properties such as Almas Tower in JLT have gone up to Dh150 per square foot per year. In new buildings on Shaikh Zayed Road towards the Trade Centre area, rents now cost Dh100 to Dh140 per square foot. Downtown Dubai and Emaar Square areas command the highest rents hovering between Dh140 and Dh180 per square foot annually.
In the retail sector, Paula Walshe, head of commercial at Cluttons in Abu Dhabi said they have seen considerable interest in small non-mall retail spaces across Dubai especially in JLT and Al Barsha. “This interest has been from independent operators including locals,” Walshe told Gulf News.
Cluttons said the retail sector is exhibiting positive signs with Emaar Properties reporting an increase in visitor traffic and sales. Footfall is strong in shopping areas like Mall of the Emirates, Mirdif Mall and Deira City Centre, which enjoy very low to zero vacancy rates.
