The Middle East’s City of Gold is continuing to show signs of stability in its office market, despite a general slowdown in the market, according to the latest quarterly figures from property consultant, JLL.
“Dubai’s commercial sector has been largely stable with demand focussed on the higher quality offices of the Central Business Districts, most notably the DIFC, which continues to see increased demand and thus higher rents,” said Craig Plumb, Head of Research at JLL MENA.
“Conversely, lower occupancy rates have resulted in a marginal softening in rents in secondary locations. One notable trend is tenants are now migrating between free zones as licensing requirements are relaxed. The limited supply of new office space in TECOM has resulted in many tenants moving to the nearby JLT free zone. ”
While demand for office space remains stable, overall the Dubai real estate market continued to experience a slowdown in performance during the third quarter of the year, which is expected to continue over the remainder of 2015.
“The recent slowdown in Dubai’s hotel market can be partly attributable to a decrease in the number of tourists from Russia, South Asia, Far East Asia and Africa visiting Dubai,” said Plumb.
“Despite this, occupancy rates are still high when compared to other international markets, but we expect this to soften with the delivery of an additional 450 rooms at the Intercontinental in Dubai Marina, Ibis Styles in Jumeirah and Hyatt Place in Deira. We are also seeing efforts to diversify Dubai’s tourist base away from leisure and entertainment with the potential to establish Dubai as a leading medical tourism hub. Initiatives such as this will help to ensure a constant stream of visitors.”
Click here to read the full report: Dubai Real Estate Market Overview – Q3 2015