This year the flight to quality continued with single-owned buildings with good amenities and effective management experiencing high demand. New grade A, dual-licensing development, Dubai Design District or d3, has performed well and absorbed demand with over 90 per cent leased with year-on-year rental increases since its launch in 2015. The first phase of One Central in World Trade Centre is now fully leased. A variety of enquiries continue with steady and strong demand from global corporate tenants. Industries that remain more active are media, technology and health care, with a lot of new requirements coming from the US.
Overall prices as well as transaction volumes witnessed a decrease during the second and third quarters, but not in all locations. Jumeirah Lakes Towers, Al Barsha Heights, Dubai Silicon Oasis and Dubai Investments Park witnessed the highest quarter-on-quarter drop in rentals as new deliveries with low entry points lowered the market average.
Dubai Marina, Downtown Dubai and Shaikh Zayed Road have witnessed declines of 5-10 per cent since last year, while rents in DIFC, Dubai Internet City and Knowledge Village remained relatively unchanged, if not rising in some buildings. Looking forward, the unchanged rents in DIFC, Internet City and Knowledge Village are likely to soften as further supply is added in the next one to two years.
Major projects in the pipeline and completing soon include DIFC’s Gate Building 11, the expansion of One Central at the Dubai World Trade Centre and HSBC’s new headquarters in Downtown. Further out, rents are expected to remain fairly flat as more supply continues to come online with ICD’s Brookfield One Brookfield Place, Tecom’s Innovation Hub and Al Wasl commercial tower located next Al Mazaya Centre on Shaikh Zayed Road.
