You are here: Home » Breaking News » MarketView from Dubai: Q4 2009 » Morocco
Breaking News - Morocco
Send to friend
Discuss on CityscapeConnect.com
All RSS feeds
MarketView from Dubai: Q4 2009
03 Feb 2010
With Mat Green, Associate Director – Research & Consultancy, CB Richard Ellis Middle East
Overview
- The real estate market remained sluggish during the final quarter of 2009 with few signs to suggest any imminent upturn in fortunes.
- Vacancy rates in the CBD are still prevailing in single digits, but some secondary locations are now over 30%.
- Infrastructure and transportation projects remain on track despite the slowdown in real estate projects.
Office Sector
- Lease rates continued to drop during 2009 as demand remained weak and supply increased substantially
- Rental rates in prime business areas, excluding DIFC, ranged between AED1,950 to 2,400/sqm/annum during the quarter with little change from Q3, 2009.
- Sliding lease and occupancy rates continue to incentivise landlords to offer rent free periods, inclusion of service charges, and multiple cheques.
- New office space continued to emerge in existing as well as new office districts. During the course of 2009 a total of 0.58 million sqm of new office accommodation entered the market in both freehold and non-freehold locations.
- The majority of office space in freehold locations was pre-sold on strata title with only a limited number of towers actually being held by a single owner - approximately 49% of the total new stock which entered during 2009 was sold on a strata title basis.
Residential Market
- A high volume of new supply coupled with lower demand continues to affect lease rates across virtually all major residential districts of Dubai.
- However, the fall in Q4 was minimal compared to the three previous quarters in 2009.
- A comparative analysis of eight residential districts reveals that lease rates have dropped by 41% and 40% in the freehold and non-freehold locations respectively on a year-on-year basis.
- Declining lease rates during the year saw a steady migration of residents to newer locations closer to their place of work and there was also a marked shift towards larger units.
- Average lease rates for a three bedroom apartment in Bur Dubai during Q4 were between AED90,000 - 110,000/unit/annum - similar to prevailing rates in Q4, 2008 for a one bedroom apartment.
- The considerable drop in lease rates, together with landlord incentives, has resulted in an increasing number of tenants terminating contracts on completion of leases to seek better alternatives.
Outlook
- Newer areas which are already experiencing high vacancy rates are expected to see rents dip further as competition for tenants continues to lead landlords towards greater incentive packages.
- Handover of significant strata office space is expected to create issues for landlords and occupiers. With most buildings sold to multiple investors, leasing of contiguous units could be problematic.
- Lease rates for residential units are likely to see a further contraction during the course of the year as a substantial volume of new accommodation reaches the final stages of construction.
- It is expected that new supply will have the most affect on villa units, with a high number of new developments helping to significantly increase supply in this sector.
Source: CB Richard Ellis (CBRE)
-
Dubai International Financial Centre (DIFC) Development - The Gate Village
-
Dubai International Financial Centre (DIFC) Development - The Hexagon Dubai
-
Dubai International Financial Centre (DIFC) Development - Phase 1 - The Gate
-
Dubai International Financial Centre (DIFC) Development - Mixed Use Tower
-
Dubai International Financial Centre (DIFC) Development - Emirates Financial Towers
-
Dubai International Financial Centre (DIFC) Development - One Central Park (Index)
-
Dubai International Financial Centre (DIFC) Development - The Lighthouse Tower
Login
Find A Company
Weekly Email News Round-up
Related news by topic
Indian real estate, one of the better performing markets across the world
02 Sep 2010
Indian real estate, one of the better performing markets across the world. Modest rise in tenant dem...
Rental Homes Are Still In Demand
02 Sep 2010
Dubai is passing through the phase of economic down break which has lowered the rates of property. S...
Commercial Property Investment Is Beneficial
01 Sep 2010
Along with residential property, investment in commercial property can also be profit generating
Dub...
