Global real estate analysts Cluttons predict demand for commercial office space in Dubai to match that of its 2007 peak by the end of 2012.
The news will be warmly received by commercial property investors ahead of the Cityscape Global real estate exhibition, which begins today in the wealthy Arab emirate.
A report released by Cluttons in April 2012 predicted that the total office supply in Dubai would rise by 70m sq ft by the end of 2012, with vacancy levels yet to fall below 40%.
Nick Maclean, managing director of global real estate adviser CBRE, believes such figures fail to fully explain current market trends, he said: “There are some interesting things happening… The headline numbers in terms of vacancies are not the true picture in terms of what is going on at the moment,”
“We have seen in the first seven months the same level of take up in the whole of 2011, which is as least as good as 2007. There is quite a lot of activity at the moment”.
Maclean goes on to state that demand has so far been driven by the oil, gas and corporate sectors, “which have had their reins released to come and look for new markets”.
“It is the not just people upgrading… We have got people effectively expanding their businesses, not just relocating. Business sentiment in Dubai is strong and there is demand… It hasn’t been this strong for some time,” he claimed.
CBRE’s forecast for the Dubai serviced office market was less optimistic, with an increase in demand of around 4.5m sq ft by the end of 2012, with rents remaining static.
Four consecutive quarters of flat growth in Dubai led a recent CBRE report to predict the rental outlook for 2012 as “one of continued stability, albeit with attractive landlord incentives on offer”.
Such activity suggests the consolidation period that followed the emirate’s first commercial property boom is coming to a halt, with investors predicting more measured growth in the oil rich state.