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According to Core Savills real estate company, prices for commercial rental property fell in half of Dubai’s areas in the third quarter of this year. Other half remained unchanged, whereas previously they showed steady growth. Experts are linking this to the general economic situation. Low oil and gas prices made many local companies optimize their costs on rent. "Most of the owners have to adapt to current conditions and show greater flexibility", - says Core Savills’ Head David Godchaux.
According to another real estate company JLL, demand for offices in Dubai bigger than 900 square meters has fallen markedly since the beginning of the year. In 2015, this kind occupied 30% of all transactions concluded, but the share has shrunk to only 12% in the first nine months of 2016. JLL reports that renters now tend to save money by taking smaller offices. Average leased office space in the first nine months of the year amounted to 550 square meters. A year earlier, the number was 1 300 sq. m.
The situation on the Dubai office market is nearing the bottom and is expected to start restoration soon, according to Core Savills. Mr. Godchaux says it can happen in the next three to four months, yet other market participants do not agree with him.
Faisal Durrani, Head of Research at Cluttons consulting company said that recovery in prices for commercial real estate in Dubai can be expected no earlier than in summer and autumn of 2017. The company marked immutability of prices in some areas over the past six months, yet its representatives do not think that this suggest the rock bottom price.
Prices for apartments in Abu Dhabi fell by 3% since the beginning of the year, the decline was 0.5% in the third quarter. At the same time, according to Cavendish Maxwell company, prices for rental apartments and villas fell by 1.8% and 2.4% respectively. The company’s CEO Jonathan Brown notes that low oil prices are a prompting demand for more compact housing. Developers, in turn, are forced to adapt to the current condition and launch more democratic projects in hope to find a buyer.
Neighboring Qatar is suffering from similar situation. According to local company DTZ, rental rates for one-bedroom apartments in Doha have fallen by 10% since the beginning of the year. "Many expats have not renewed their contracts," - commented the company, noting that costs cutting in public and private energy companies forced "tens of thousands" of office workers leave the country. Head of DTZ Johnny Archer told that given ongoing construction of new facilities in Doha, the situation has already led to a significant excess of supply over demand.
Market participants in Qatar hope that the prices will recover near the football championship in 2022. Mr. Durrani from Cluttons believes that potential buyers prefer to wait until the Qatari government launches new projects to mark the championship. "Buyers will rush in here", - the expert believes.
source: ft.com, thenational.ae
According to another real estate company JLL, demand for offices in Dubai bigger than 900 square meters has fallen markedly since the beginning of the year. In 2015, this kind occupied 30% of all transactions concluded, but the share has shrunk to only 12% in the first nine months of 2016. JLL reports that renters now tend to save money by taking smaller offices. Average leased office space in the first nine months of the year amounted to 550 square meters. A year earlier, the number was 1 300 sq. m.
The situation on the Dubai office market is nearing the bottom and is expected to start restoration soon, according to Core Savills. Mr. Godchaux says it can happen in the next three to four months, yet other market participants do not agree with him.
Faisal Durrani, Head of Research at Cluttons consulting company said that recovery in prices for commercial real estate in Dubai can be expected no earlier than in summer and autumn of 2017. The company marked immutability of prices in some areas over the past six months, yet its representatives do not think that this suggest the rock bottom price.
Prices for apartments in Abu Dhabi fell by 3% since the beginning of the year, the decline was 0.5% in the third quarter. At the same time, according to Cavendish Maxwell company, prices for rental apartments and villas fell by 1.8% and 2.4% respectively. The company’s CEO Jonathan Brown notes that low oil prices are a prompting demand for more compact housing. Developers, in turn, are forced to adapt to the current condition and launch more democratic projects in hope to find a buyer.
Neighboring Qatar is suffering from similar situation. According to local company DTZ, rental rates for one-bedroom apartments in Doha have fallen by 10% since the beginning of the year. "Many expats have not renewed their contracts," - commented the company, noting that costs cutting in public and private energy companies forced "tens of thousands" of office workers leave the country. Head of DTZ Johnny Archer told that given ongoing construction of new facilities in Doha, the situation has already led to a significant excess of supply over demand.
Market participants in Qatar hope that the prices will recover near the football championship in 2022. Mr. Durrani from Cluttons believes that potential buyers prefer to wait until the Qatari government launches new projects to mark the championship. "Buyers will rush in here", - the expert believes.
source: ft.com, thenational.ae
