Commercial rents in Abu Dhabi and Dubai fall back to pre-covid rates

Office rents in Abu Dhabi and Dubai have started to come back to pre-COVID-19 levels as the demand for premium space increases.

Commercial rents in Abu Dhabi and Dubai have started to come back to pre-COVID-19 levels as the demand for premium space increases.

As per the global real estate consultancy Knight Frank’s analysis released on Monday, 18 April, 5 of 27 locations in Dubai have witnessed office rents returning to pre-covid prices. While in Abu Dhabi, the best buildings are still showing rental stability.

Advertisement

The partner and head of Middle East research at Knight Frank, Faisal Durrani, “Despite the quieter ending to 2021, early data from Q1 suggests a rebound in demand in Dubai, due to technology businesses extending their footprints, albeit many are start-ups.”

“To an extent, the growth by this group of occupiers is being deteriorated by several businesses that are still reassessing their occupational plans, many of whom are shrinking their office footprints as a result of the growth in hybrid working models, which appear to be acquiring a sense of permanency, especially amongst international blue-chip and professional services businesses, and a handful of international banks,” he further added.

But, Knight franks still points towards a lack of new prime stock, maintaining upward pressure on rents in good buildings in some areas.

“There is a minimal supply pipeline of high-quality office stock in Dubai, where the concentration of businesses remains centred. The effect of this market paradox is upward pressure on rents, or at worst, stability in lease rates among the city’s best buildings, while some of the older, the more secondary stock is beginning to undergo a migration of businesses to better quality buildings,” explained Andrew Love, head of Middle East Capital Markets and Knight Frank, Occupier Services & Commercial Agency.

Business Bay is leading the comeback in office rents, where average rents have risen from Dh76 per square foot in Q1 2020 to Dh101 psf (per square foot).

Whereas in Abu Dhabi, office rents in all of the main submarkets tracked by Knight Frank have stayed stable during Q1. Every year, the Corniche Area resumes pulling away from the rest of the pack, with moderate rents climbing by 7.2% over the last 12 months, taking them to Dh1,675 psm.

Advertisement

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Read More

UAE: Sheikh Nahyan bin Zayed crowns winners of Fatima bint Mubarak Women Sports Award

The Chairman of the Board of Trustees of the Zayed Charitable and Humanitarian Foundation, and Chairman of Abu Dhabi Sports Council, Sheikh Nahyan bin Zayed Al Nahyan has crowned the winners of the sixth year of the Fatima bint Mubarak Women Sports Award.

Egypt says it contains enough vaccines to inoculate 42 million population

The Ministry of Health and Population, in its recent statement, noted that the country is having enough stock of the COVID-19 vaccines to inoculate at least 42 million people. 

Ultra-luxury golf community to open in Dubai South

An ultra-luxury golf community is set to launch in Dubai South. A US-based luxury real estate developer and operator of private residential club communities, Discovery Land, signed an exclusive agreement with Dubai South, having bought a plot for Dh1 billion ($272 million).

Recent

Hive opens its door in Dubai, no penalty on moving out early

A recent co-living space has been built in Dubai, giving people on yearly rental contracts the freedom to move out as per their own will without incurring huge penalties.

India’s billionaire Mukesh Ambani breaks world record, buys most expensive villa in Dubai

The wealthiest Indian, and one of the top most prosperous men in the world, Mukesh Ambani, buys the most expensive villa in Dubai for a record-breaking $163 million.

Dubai Super Sale: Dates of three-day sale announced; upto 90% discount on major brands

Dubai Festivals and Retail Establishment (DFRE) has disclosed the dates of the much-awaited upcoming three-day super sale that will be conducted between May 27 and May 29 around Dubai's major shopping malls and retail stores.