Given the market’s supply limits, it is anticipated that the cost of leasing offices in Dubai would increase dramatically over the coming months.
According to Khawar Khan, Head of Research, MEA & Turkey at JLL, robust demand has been exceeding supply by a significant amount, making rent hikes over the next 12 months more likely to be in “double digits.”
“There aren’t enough deliveries in the market… Demand is outpacing supply significantly,” Khan said at a briefing hosted by the real estate consultancy firm.
According to JLL’s analysis, Dubai’s office market had a total stock of 9.1 million square metres of gross leasable area (GLA) as of the third quarter of the year. A further 53,000 square metres are projected to be delivered in the fourth quarter, increasing the supply before the end of the year.
In Abu Dhabi, the total stock stood at 3.9 million square metres, but there are no planned deliveries towards the end of the year.
Since workers began coming back to the office from remote work, the need for office space has increased. Since the COVID-19 lockdown, Dubai has had rapid economic growth, and the number of new firms has increased.
Asteco stated in a different report that the third quarter of the year saw an increase in demand for new office space.
“Although office rental rates were relatively stable over the last three months, there was an increase in demand for new space, which is likely to be reflected in an improvement in rental rates in the next quarter,” Asteco said.