The Global Commercial Property Survey by the Royal Institution of Chartered Surveyors (RICS) showed a significant increase in investor confidence in the UAE commercial property market. The country came in second in the RICS Investment Sentiment Index. These Indices track how investor sentiments change over a quarterly period in different countries.
The real estate markets in the UAE, as well as the United States, Japan, and across Asia have continued to make a steady recovery, which is adding to a general feeling of investor confidence. The UAE is seeing the results of the changing market conditions.
At the beginning of the year, global property consultancy Jones Lang LaSalle predicted prime office rents would increase for the first time since 2008. The Department of Economic Development in Dubai stated that improvements making it easier to do business are bringing growth into focus. Seventy-four per cent of survey respondents said they would invest in expanding their business. In Q2 2012, only 30 per cent were prepared to put up funds for expansion, and in Q3 of 2013, the business outlook remained steady.
In the Q2 report on the Dubai market, the average quoting rents in quality office buildings in selected areas had increased by eight per cent in the second quarter compared with the first three months of the year.
The top prime rent increased to Dh2,600 per square meter in the Dubai International Financial Centre. It decreased to Dh1,722 per square meter in other parts of the central business district. Outside this area, prime rent hit the Dh1,685 per square meter level in Q2 of 2013.
There was a trend among occupiers relocating out of older areas to move to buildings located in newer areas like Jumeirah Lakes Towers, Downtown, Business Bay or Jebel Ali.
Current office stock in Dubai currently stands at 7.2 million square meters. There is an additional 1.4 million square meters of space slated for delivery in the next two years. Vacancy rates for single ownership buildings in CBD were sitting at 31 per cent in the second quarter, according to Jones Lang LaSalle.
