(MENAFN- Khaleej Times) Close to 17000 new units are expected to be completed in 2014
office stock in dubai continues to see significant growth with over 1.8 million square metre set to be delivered by the end of 2017 amid a sustained year-on-year rental rally in both office and residential sectors respectively by 21 per cent and 22 per cent the latest dubai marketview by global property advisor cbre said on wednesday.
the average prime annual rental rate now measures dh1830 per square metre in dubai and this figure is expected to experience further upward movement. — afp
there is a large pipeline of new office supply in dubai but the majority of this space will be negatively impacted by its strata ownership title where different investors own one or more floors in a building making it harder for renters to find large spaces with a single owner.
according to cbre during 2014 as recovery in property market sustains around 0.44 million square metre of office stock is scheduled for completion with close to 30 per cent of this total to be delivered in the business bay area.
cbre said dubai’s residential sector has seen rents surge by an average of 22 per cent year-on-year with apartments registering an increase of 29 per cent while villa rentals have grown by 15 per cent. office rentals continue to rise with average prime cbd (central business district) rentals up three per cent quarter-on-quarter and 21 per cent year-on-year. the average prime annual rental rate now measures dh1830 per square metre and this figure is expected to experience further upward movement over the course of the year as the emirate’s business environment continues to improve.
mat green head of research & consultancy uae cbre middle east said the rising cost of living in the emirate is now starting to become a very real concern for many residents with rentals having risen by an average of 45 per cent during the past two years.
however quarter-on-quarter rental growth has been more marginal at around 2.8 per cent with apartments rising by three per cent and villas by 2.6 per cent. the strongest sub-markets for apartments were sports city downtown dubai jbr international city and dubai silicon oasis. for villas the best performing markets were al warqa and springs.
“dubai’s residential sector continues to experience growing demand from both occupation and transactional sources. despite recent regulatory changes both rentals and sales prices continue to rise albeit at a marginally slower rate than was recorded during the previous quarter” said green.
“the residential development pipeline is again starting to swell with an ever increasing number of new projects being launched. whilst this pipeline is still far smaller than witnessed during the last cycle it is nonetheless something to monitor carefully in the coming years with a danger that further down the line supply could again start to exceed demand fundamentals” said the report. cbre predicted that in 2014 close to 17000 new units are expected to be completed with the majority of these set to be delivered in secondary locations such as dubailand jumeirah village circle and silicon oasis. over the next four years roughly 65000 new units are penned for completion with 83 per cent of these apartments and villas and townhouses comprising the balance.
“with sustained demand for both occupational and investment properties we anticipate that residential rental and sales growth will continue throughout 2014. however we expect growth levels to be lower than 2013 performance as affordability becomes a more influential driver of property moves. we expect to see an increase in the flight to affordability with occupiers starting to consider sharjah and the northern emirates as a cost sensitive alternative to dubai” said green.
— issacjohn?khaleejtimes.com
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