Demand remains high for prime office space in Dubai despite the huge volume of commercial property coming onto the market.
A report by chartered surveyors Cluttons found that the amount of office space in the Emirate will grow by almost a fifth this year to 650,000m².
Though vacancy rates have remained at about 40 per cent, rents for prime developments have remained stable over the past three months due to an ongoing shortage of top quality office spaces larger than 3,700m².
Ex-RIBA president Jack Pringle, a partner at Pringle Brandon, said: ‘There is a lack of good space in Dubai. The [first generation] Dubai office stock featured some pretty odd buildings which delivered very substandard space.
‘There is little on the market of the quality of the DIFC and Emaar Square. That explains the demand for new good space along with quite a high vacancy rate’.
Cluttons also noted a greater occupier appreciation of sustainability initiatives in potential offices.
The Dubai International Financial Centre, Emaar Square and the Sheikh Zayed corridor remain the most expensive locations.
The Dubai retail market slowed in 2011, but an extension of Dubai Mall has recently been announced, along with development of the Mall of Arabia. Cluttons also reported slight growth in development of smaller community shopping centres.
The hospitality sector continues to thrive as Dubai ploughs on with developing its tourism infrastructure. Cluttons said there was an emphasis on mid-market hotels, not just luxury ones, and that several hotels were considering refurbishment or redevelopment.
Cluttons reported earlier this month that luxury villas were increasing in value