Dubai has earned two distinct and inverse accolades as it has been declared the fastest declining commercial real estate markets in the world in 2009, while still remaining as one of the most expensive along with neighbor Abu Dhabi.
Dubai office rents plunged 34 percent during the year due to the impact of the economic downturn, the third-biggest decline out of the top 50 markets behind Singapore and Moscow, consultancy DTZ Research said in its annual report.
The city slumped out of the top 10 most expensive cities in the world for commercial property to No. 11 from No. 3 in 2008, DTZ said.
Office rents in Abu Dhabi, meanwhile, slid 22 percent in 2009, causing the city to drop to No. 12 from No. 8 last year, it said.
Global average occupancy costs, measured per workstation, saw a 4 percent decline last year, while the Middle East and Africa region witnessed a 12 percent fall, DTZ said.
Consultancy Knight Frank said in its annual report Dubai office rents slumped 37.25 percent during 2009, while Abu Dhabi rents fell just 6.7 percent.
Knight Frank ranked Abu Dhabi as the sixth most expensive commercial market in the world, measured per square metre, followed by Dubai in seventh place. The consultancy did not give comparative figures for 2008.
Knight Frank said London’s West End was the most expensive market last year, followed by Tokyo’s Central 5 Wards. DTZ ranked Tokyo the most expensive with the West End in second place.
Both consultancies forecast further declines in office rents in Dubai and Abu Dhabi due to oversupply.
In Dubai a quarter of office space is currently vacant, according to analyst estimates.
Source: Maktoob Business