Dubai Office Rents likely to fall further

As per property broker Jones Lang La Salle, Office rents, which have shrunk to 2007 levels across Dubai, might even fall further, since additional supply would aggravate the already-weak office space market.

The second quarter saw office rents plunging by an average of 25 per cent, compared to 45 per cent in the first quarter. Jones Lang said that rents are now at the level of Dh225 per square foot for premium office space, the lowest since mid-2007. This appears when the Dubai International Financial Centre is excluded.

He continued, "At these rates, prime office spaces in Dubai are even lower than those in major international office centres of London, Paris, Hong Kong, Mumbai and Moscow."

The Dubai office rents are predicted to decline further due to new supply coming in. Notable 25 million square feet of additional space is estimated to enter the market, by the end of 2011.

A hike is visible by nearly 25% in the vacancy rate during the second quarter, with more than two million square feet that entered the market in a subdued leasing demand.