Monday, June 21, 2010

DIFC rentals stagnant during the last quarter

There has been no rental decline in DIFC (Dubai International Financial Center) during the past three months, which is an indication of the office rental scenario in Dubai, said a recent study report by CBRE.

The DIFC rents declined 11.1percent last year, in contrast to steep decline of 29.2 percent in rentals witnessed in other cities such as Moscow, during the same period.

Ireland, France and Poland also witnessed considerable decline in office rentals during the past year at 30.4percent, 16.7 percent and 17.9 percent respectively.

Meanwhile, with increase in supplies, tenants in Dubai are expecting landlords to offer better incentives. Abu Dhabi too witnessed continued occupier interest during the first quarter this year, and the market seems ready to offer incentives. Moreover, rents dropped during the first quarter due to few poor quality stocks.

The report said that with about 400,000 square meters of new Grade A office space being delivered in 2011, landlords of vacant Grade B buildings are in tenants favour. Following an initially bullish outlook for 2010 from landlords, landlords of vacant Grade B buildings are cutting rents more aggressively to secure tenants before this influx of new buildings.

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