|
 |
News |
 |
|
| |
Email this article |
 Printer Friendly Version
|
| |
Dubai freezone office rents slump on sluggish demand
|
| |
09.30.2009 |
| |
|
| |
| |
UAE. Duabi office lease rates in some of the newer freezones has fallen up to around 70% and the decline is expected to continue because of sluggish demand and new supply coming on board, a CB Richard Ellis Middle East survey released on Tuesday showed.
Leasing rates in the new freezone of Jumeirah Lake Towers (JLT) have fallen between 57%-71% compared with the third quarter of last year,
Office space in the JLT freezone has more than doubled to 5.2 million square feet in the same time from 2.5 million.
"During the remainder of the year and into 2010 we expect the leasing market in these areas to remain sluggish," said Matthew Green, associate director at CBRE Middle East, pointing out that "additional pipeline stock" was the main culprit.
"The decline in local real estate markets over the past year may has brought misery to many investors but the notable drop in both sales and lease rates will actually help to position the UAE as a more attractive business location," Green added.
"The completion of considerable new stock over the coming years is likely to further increase competition between landlords, leading to more favourable lease rates and lease terms for tenants."
The CBRE survey says that the success of the Dubai's well-established freezones, such as TECOM's Dubai Media City, Dubai Internet City and Knowledge Village, home to global media, technology, consulting and educational firms, the Jebel Ali Freezone and the Airport Freezone, encouraged the creation of new freezones, which are now suffering amid an economic downturn.
On average, rents in JLT freezone have fallen to AED70 (US$19) to AED100 a square foot currently from AED240 to AED280 in the third quarter of last year.
Other developments to have witnessed a sharp drop in lease rates include Dubai Silicon Oasis and TECOM, with properties in these developments being largely sold to private individual investors.
Office space from private developers in Dubai Silicon Oasis is typically offered at AED50 up to of AED80 per square foot while in TECOM, rents are in the range of AED85-130.
The Dubai International Financial Centre (DIFC), home to the globe's best known names in finance and banking, currently commands the highest office least rates at between AED280-AED325 a square foot, the report said.
However, prime lease rates in the DIFC were about AED550 a square foot in the third quarter of 2008, before the financial crisis hit the UAE.
"Office rents have already declined by over 50% in some locations, offering tenants considerably more value than was present at this point last year," Green said.
|
| |
Source:www.bi-me.com |
news |
| |
Email this article | Printer Friendly Version |
|
 |
| |
|
|
|
| Current Events |
 |
|
| DubaiGetaway |
 |
|
| Featured Links |
| |
|
|
|
