The UAE commercial sector has stabilized now, with demand from occupiers having touched a four-year high, a new report revealed.
The Royal Institute of Chartered Surveyors (RICS), in its third quarter ‘UAE commercial survey’, said that the UAE real estate sentiment showed gradual recovery during the third quarter, with occupier and investment indicators having improved owing to positive response during the second quarter.
The strong demand for both office and retail space has resulted in increased net balance since the year 2008.
The UK-based institute expects increase in availability of space, despite the surplus office space rental levels that are likely to remain unchanged.
On the investment front, there have been increased purchaser enquiries across all sectors, and future transactions are expected to grow well. There are evidences indicating that the country has benefited from its safe haven status in the region, and subsequent influx of capital into the real estate sector.
Further, the sale of distressed properties has dwindled, and this was one of the main reasons for optimism of future values. There has been stability in the third quarter on supply of foreclosed properties, following the growth for the past three years.
Jones Lang LaSalle (JLL), in its Fourth Quarter 2012 report based on Global Market Perspective, said that the Dubai office market will become neutral in 2014 and 2015, although, 2013 still remains tenant-favourable.
According to global office market conditions matrix (2013-15), Brussels, Frankfurt, Washington DC, Stockholm, Madrid will all join Dubai as tenant-favourable markets next year. Meanwhile, New York, Toronto, San Fransisco, London, West End, Beijing and Mosco are considered landlord favourable markets.
Other like Chicago, Mexico City, Los Angeles, Sao Paulo, Paris, Mumbai, Hong Kong and Tokyo all hold a neutral status.
The JLL report said that although the overall office market in Dubai continues to be tenant-favourable, the demand is still focused on just few buildings and locations.
According to report by global property consultants, nearly 460,000 square meters of office space have been delivered over the first nine months of 2012, while an additional 335,000 square metres are likely to enter the market by the year-end. The current office stock in Dubai is 6.9 square metres.