The clusters in Tecom (now known as Barsha Heights) and the funky Dubai Design District continue to be the top performing office clusters in Dubai, while there is a turnaround in the fortunes of JLT (Jumeirah Lake Towers) during the third quarter.
“After a sharp annual drop of more than 20 per cent, rents seem to have finally bottomed out while the lower rental range saw no change from Q2-16 to Q3-16,” says Core Savills in its latest report. “September and early October have seen a revival in interest from SMEs and commodity tenants with a bulk of activity concentrated in the 1,000-2,000 square feet bracket.” (The standout commercial properties in terms of occupancy levels are JBC, which could put “pressure on rentals due to their single ownership and perceived locational advantages”.) In comparison to the situation with Grade A offices in Abu Dhabi, Dubai’s veered from stable to seeing sharp gains in the recent quarter. It would also give a good deal of boost to developers who are currently converting their projects from residential into commercial and thus trying to plug a few gaps in office space availability.
Meanwhile, Tecom and D3 continue to standout in generating demand. The former continues to see occupancies “hover northwards of 90 per cent across most towers and we see strong demand, especially from existing technology and media occupiers looking to expand,” the report states. “This has led Huawei to purpose build its new national headquarters in Tecom.
And D3 has “bucked the overall trend of flat rentals and was able to lease out 85 per cent of its fi¬rst phase, now commanding 70 per cent higher rents than its opening lease rate last year. Due to its extremely high occupancies, it is now able to be selective in choosing fashion and design tenants. We expect a similar positive response to its next phase which is estimated to be delivered in 2019.”
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