The study noted that over the short term, with demand for commercial property outpacing supply, rents will continue to rise. This has sustained the trend of rental increases.
Market analysis estimate commercial occupancy rates of around 99 per cent in both traditional and newer areas of Dubai. "According to our estimates, office rents have risen by almost 40 per cent year-to-date (YTD) in both old and new areas of Dubai as demand continues to outweigh supply," it said.
The bank's analysis shows that office and commercial rents in Old Dubai (Garhoud, Bur Dubai and parts of Sheikh Zayed Road) have risen by 36 per cent on average (YTD) and in new Dubai (Shaikh Zayed Road, DIFC, Business Bay, Jumeirah Lake Towers, Internet and Media City) by almost 45 per cent (YTD).
"The more luxurious Grade A properties in both areas jumped by around 35 per cent on average. Finding office space in the city remains arduous, with companies settling for less desirable locations, renting temporary space in villas, setting up branches or smaller offices or buying rather than leasing office space. Newer areas of Dubai have become centres of commerce, a trend that explains why rental rate increases are not easing in these locations."
It observed that selling prices for off-plan developments in the DIFC, Burj Dubai and offices in the JLT have increased by approximately 17 per cent over the past eight months due to the desirability of their locations and on expectations of strong yields based on current off-plan prices and expected future rents.
