Office rents in Dubai have declined by 4.5% in the second quarter of 2017 as market activity remains relatively subdued in the first half of the year, a new report finds.
According to the latest Knight Frank Dubai Office Review Q2 2017 report, office rents across Dubai fell 5.1% on average in the year to Q2 2017, as prime and secondary markets report more stable numbers.
Occupancy rates for Grade A office rents have fallen by 4.4% year-on-year and 2% over the last three months across the Burj Dubai area, Sheikh Zayed Road, and Trade Centre district.
Prime rental performance however has remained relatively stable with average rents showing a 1.3% increase in the three months to June in areas like the Dubai International Financial Centre (DIFC).
Rents have also remained stable in key locations such as Internet City, Media City, and Knowledge Park, which continue to maintain low vacancy rates ranging 2-3%.
“High occupancy in prime markets will continue to support rents, which supports our view that prime rents will rise further this year,” the report said.
Additionally, the delivery of additional Grade A stock will off-set any potential upside in rental values, as activity in the commercial market is expected further stabilise in the second half of 2017.
Mathew Reason, senior surveyor, Knight Frank said: “The commercial market activity is expected to pick up in the latter half of the year with rental trends likely to continue their currently trajectory given the embedded supply dynamics.”