Office Rents in Dubai, Doha to surge by 20%

The office rents in Dubai, and Doha are likely to go up by 20% next year, as the demand surpasses supply, and due to the expansion of international business in the Gulf region, revealed the property services company, CB Richard Ellis.

"The top-quality offices in Dubai, cost as much as Dh.500 per square foot, and this in-turn could increase prices to Dh.600 per square feet next year, which would continue for 18 months, and thereafter the prices may probably halve to about Dh.300 per square foot in another five or six years with an increase in market supply" says Nicholas Maclean, the Managing Director, CB Richard Ellis.

However, at present, there are not enough supplies reaching the market, which would do no good to the businesses or for the government.

As far as Doha property is concerned, the demand is increasing, with an expansion in oil and gas companies, and the government is seeking new space. Although, the prices in Doha are lower than that in Dubai, the trends are the same.

On the other hand cities in India, Egypt, and Philippines are gaining advantage from the rising prices, as businesses turn to them for back-office operations, said Maclean.

The office space in Dubai is likely to more than triple touching 100 million square feet, as against the present 30million, during the next five to six years, Maclean concluded.

Dubai Real Estate Corporation chalks out plans for further strengthening Dubai real estate sector

Dubai Real Estate Corporation (DREC) has begun operations towards development of Dubai real estate sector, so as to fill in the niche market gaps and boost urban growth of Dubai. DREC was recently established following a verdict by H.H. Sheikh Mohammad bin Rashid Al Maktoum, the Vice President and Prime Minister of UAE and Ruler of Dubai.

DREC is a full-solution real estate company, responsible for offering various value-added services, such as leasing and facility management services, real estate management services, and asset management consultancies, for properties that are registered in the name of Dubai Government or any of its departments. Even investments within the entertainment, hospitality and leisure sectors are all based on DREC's operations, and the company has confirmed its plan to develop these specific areas in future.

The Chief Executive Officer of DREC, Hisham Al Qassim, says "DREC has been established to further strengthen the real estate assets in Dubai, and we intend to accomplish this by concentrating on major areas, targeting niche market gaps, and complementing the urban growth by focusing the underdeveloped areas. We are planning a country-wide expansion in the near future, and hope to play a major role in the next chapter of UAE's development."

Currently, DREC is carrying on preliminary studies on the Dubai property sector, and the results will indicate the key areas for development, depending on market demand and growth potential. The company has revealed its intentions to begin operations by focusing on prime areas, while also maintaining strong market in commercial, residential, industrial, and tourism sectors.

Dubai property prices unlikely to stabilize in next few years

The real estate prices in Dubai are unlikely to stabilize during the next five years, in case the rent-cap is not lifted, and if the government does not take initiative to implement measures that could contribute in improving the supply market, say experts.

Property price trends in DubaiA study of the Dubai real estate sector by the Dubai Chamber of Commerce and Industry (DCCI) revealed that demand and supply of real estate will reach equilibrium only in 2023, provided, the government does not interfere or bring in new policies.

The Director of DCCI's Data Management and Business Research, Dr. Belaid Rettab, said "Equillibrium is when demand meets supply, and the prices remain stable."



Imposing rent cap, apart from delaying the process of stabilizing the market, will not be able to address price hikes too. Being supporters of liberal business, we do not prefer to have rent caps. The simplest solution to prevent price hikes is to bring in more supply to the market. The government, apart from supporting development of mortgage sectors, will also have to arrange finance facilities to developers so that they could build more, Rettab said.

The DCCI study revealed that the property prices have increased by a 10 percent cumulative annual growth rate in the medium term. The long term increase was 4 percent, which translates itself into an average price hike of seven percent, equivalent to the current rent cap imposed by Dubai government.

The DCCI study revealed that the government policies will positively influence income, population, cost, financing availability, tastes and preferences of buyers and speculation of future prices that could contribute to increase in demand.

The increase in supply will depend on the financing, production inputs cost, construction technology and expectation of future demand.