Office market showing signs that it is stabilizing across the board, balancing out at AED 40 per square foot in areas of high supply

Dubai's commercial market has seen a surge in stock, but demand is focused at the top end of the market

Residential areas such as Palm Jumeirah, the Burj District and Dubai Marina have performed robustly

High end villa rents are performing positively, demonstrating growth of 1.5% - 3% on Q1 2011

Dubai, UAE; 18 July 2011 - Cluttons, the real estate specialist that has enjoyed a dedicated Middle Eastern presence since 1976, today announces its market report for Dubai's commercial and residential markets.

According to the report, there is hope that the market is nearing the bottom of the cycle, with rents dropping at a slower rate than Q1 2011.  In selected areas the residential market has even demonstrated modest growth.  The Arab Spring has been well publicized in the media to date, but Cluttons notes that demand from Bahrain and Egypt has not yet affected the market expecting the effects to become evident in Q3 and Q4 2011.

Commercial Sector: Market Overview

The market still faces the same downward pressure on rents seen throughout 2010, with rents in new business districts such as Tecom C, Busines Bay, Jumeirah Lakes Towers (JLT) and Dubai Silicon Oasis hit hardest in terms of price reduction. 2011 is expected to carry around 10 million square feet of office stock onto the market.

Whilst supply has increased hugely, there is still a shortage of good office stock and single owner buildings outside of Freezone areas, suitable for businesses that hold a standard Dubai trade license.  

Residential Sector: Market Overview

Dubai residential rates have continued to fall, but the rate of decline has slowed significantly, with apartment rental values falling between 3.5% - 10% on Q1 2011.  The high-end villa market has proved to be more resilient and has counteracted predictions that prices would soften over the past quarter; in some areas rents have increased by approximately 1.5 - 3%. 

Time will tell whether price recoveries are an anomaly or a sign that the market has reached the bottom.  In addition, Cluttons predicts that the summer months of Q3 2011 will bring a resistance to any growth in all sectors.

Source: Cluttons Dubai property market update, Q2 2011

-Ends-

Cluttons LLP is an independent partnership of chartered surveyors founded in 1765. With a network of offices in the UK, Europe, Middle East and South Africa, Cluttons LLP offers a wide range of professional property management, agency and consultancy services across the commercial and residential sectors, for both investors and occupiers. For further information, please see: www.cluttons.com

Issued by:
Sophie Toh | Sophie Snow | Hiba Al Hafidh
Toh Public Relations
Tel: +971 50 3739502 | +971 50 3491679
Email: sophie.snow@tohpr.com

© Press Release 2011