Dubai office rents growth leading in MENA
During the first quarter of the year, Dubai became the top performer among the office markets in the Middle East and North Africa region with rents going up 20 per cent year-on-year, according to leading consultancy JLL.
Falling vacancies in the Dubai International Financial Centre (DIFC) helped the city to drive up rental values, although relatively high vacancy rates in other locations have constrained rental growth, the consultancy said in its latest JLL Global Office Index released on Wednesday (May 11).
Among other markets in the region, rents rose by 5.3 per cent in Abu Dhabi and Jeddah but elsewhere they remained mainly stable.
The overall MENA Index rose 2.7 per cent during the three months leading up to March 31, pushing the annual increase for the quarter to 11.9 per cent.
Globally, the index increased by 3.6 per cent year-on-year in Q1, the fastest annual pace of growth in four years.
“Prime rents are forecast to remain largely stable in MENA over 2016 as most of the region’s office markets continue to be tenant-favourable in the face of significant new supply and caution by occupiers,” said Craig Plumb, Head of Research, MENA at JLL.
“The ‘flight to quality’ seen over recent quarters is expected to carry on, resulting in two-tier markets with more robust demand for Grade A space and limited interest in secondary locations,” added Plumb.
In April, JLL said in its Dubai Real Estate Market Overview, that the office market continued to be the worst-performing sector during first quarter and has been has been stuck at the bottom of the cycle for a number of years. Nevertheless, it stated that, Grade A office buildings continue to generate strong demand in the market.