The surplus vacant office space in Dubai, which is likely to take years for absorption in the market, is likely to bring down rents further, says Jones Lang LaSalle (JLL), the leading global real estate consultancy, in its global real estate outlook 2011.
The prices in prime office locations have fallen 50% from their peak in 2008 and residual decline will still be recorded, the report said.
Dubai is the fastest growing office market in the world on a per capita basis, with an increase of 2.8 square feet per capita since early 2008 on A Grade quality office space, said the JLL report in October.
Meanwhile, the Landmark Advisory said that the office space in Dubai will nearly double, touching 80million square feet by early 2015, from the 41mn square feet space in early 2010.
On the other hand, Colliers International expects another 2.5mn square feet of office space to enter the market between 2010 and 2011, with total office space touching 6.4mn square meters.
However, Dubai is not the only city with rents bottoming out. Dubai is also joined by the Mexico City, Madrid, Seoul and Los Angeles during fourth quarter of 2011.
On the whole, global office vacancy rates will slowly move downwards in 2011. However, on the contrary, Asia Pacific will touch the peak of its development cycle in 2011 with a record addition of 6.8mn square meters of office space to be delivered.