New confidence in Dubai’s office and retail property sectors
The first quarter of 2013 has seen increased demand for Dubai’s office and retail space, leading experts at Cluttons to say that the improved situation will encourage stalled developments in the Gulf city to restart.
This new confidence is being led by Dubai Mall’s huge pull as a global shopping destination. However, despite the good news, Dubai’s office market continues to be very fragmented with some submarkets struggling to attract tenants.
Rents have increased over the past six months in Jumeirah Lake Towers (JLT), Tecom C, Al Barsha and Business Bay, all areas that had been hit particularly hard by the 2008 property collapse. Rents in these areas fell by as much as 50 percent in 2009.
Cluttons reported that rents were now up by 10 to 15 percent in better quality and completed projects.
Retail also saw increased activity during the first quarter of 2013, according to Cluttons, thanks to increased visitor numbers, high wealth levels in the city and increased consumer confidence. In February, Emaar Properties revealed that visitor numbers to the Emirate had risen by 20 percent in 2012 leading to a retail sales increase of 24 percent.
Annual footfall in Dubai’s malls remained strong, especially in Deira City Centre, Mall of the Emirates and Mirdiff Mall, which all target mid to high level income residents and tourists. Their continued success, says Cluttons, is revealed by low to zero vacancy rates.
The property consultancy also noted strong recent interest in community retail units located in high-density residential districts such as the Marina, JLT and Al Barsha.
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