Demand for commercial property in the United Arab Emirates (UAE) has stabilized and demand from occupiers has reached a four-year high according to a report released by the Royal Institution of Chartered Surveyors (RICS). The countries gradual recovery in real estate continued in the third quarter of 2012 and demand for office and retail space continues to be strong.
RICS is predicting the amount of available space will continue to rise, even though there is currently an oversupply of available office space in the market. Rental levels are expected to stay constant.
With respect to commercial investments, interest from potential buyers is on the rise in all sectors. Expectations are high that future transaction activity will follow in due course.
Another factor affecting the market is that the supply of properties in foreclosure has stabilized in the third quarter. It has been on the rise over the past three years. Demand for commercial real estate in this category remains high, which is supporting values.
According to Jones Lang LaSalle, the Dubai office market currently favors tenants. In 2014 and 2015 it will shift to become more neutral. Other cities which are predicted to have tenant favorable markets in 2013 include Stockholm, Madrid, Frankfurt, Brussels, and Washington DC.
Urban centers with landlord favorable markets are Beijing, Moscow, New York, San Francisco, Toronto, and London West End. Cities with a neutral status are Tokyo, Mumbai, Hong Kong, Paris, São Paulo, Mexico City, Los Angeles, and Chicago.
Jones Lang LaSalle estimates approximately 460,000 sq m of office space have been delivered in the first nine months of 2012 and an additional 335,000 sq m are likely to enter the market by the end of the year. The current office stock in the city of Dubai stands at 6.9 million sq m.
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