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- Contrasts with Abu Dhabi where average Prime office rents are 3.9% up on Q4 2020
Dubai, UAE: Knight Frank has today launched its Dubai & Abu Dhabi Office Market Updates for Q1 2021, providing insights on current performance and conditions in the commercial office markets as well as commentary on future trends in those particular emirates.
Dubai Office Market
Average Prime rents across Dubai currently stand at just over AED 200 psf, 4.2% lower than Q1 2020 and the lowest level recorded since Q3 2012, whilst average office rents Citywide wide fell by 7.7%, year-on-year. Grade A (AED 120 psf) and Citywide (AED 96 psf) rents fell by 9% and 8.7% respectively between Q1 2020 and Q1 2021.
Faisal Durrani, Head of Middle East Research at Knight Frank explained, “The fallout from Covid-19 is still being felt across the market, however there are pockets of activity emerging, with the technology-media-telecoms sector being notable active, mirroring trends in other major global markets.
“The increased level of activity stems from rising nation-wide business confidence, driven by the world-leading vaccine roll-out programme that is allowing a semblance of normality to return. Still, this doesn’t take-away from the fact that the pandemic has fundamentally altered occupier mindsets, with occupational strategies still under review, with a view to factoring greater remote working going forward.”
Looking ahead, Knight Frank reports that the trends of consolidation of space and flight to quality are likely to continue. Occupiers are, where possible, looking to take advantage of weaker market conditions to upgrade occupational space whilst being mindful of increasing total spend. Landlords are expected to remain flexible in order to retain and attract occupiers.
Abu Dhabi Office Market
As at Q1 2021, average Prime office rents across Abu Dhabi were recorded at AED 1,725 psm, 3.9% up on Q4 2020, meanwhile, average Grade A office rents stood at AED 1,192 psm at the end of Q1, -0.9% down on Q4 2020, while Citywide rents fell to AED 897 psm, from almost AED 940 psm during Q4 2020.
Market wide vacancy in Abu Dhabi’s office market registered at 21.7% at the end of Q1 2021, down slightly from 21.9% at the end of last year, meanwhile Prime office space registered a vacancy rate of 25.6% at the end of Q1 2021, down from almost 29% in Q1 2020. Grade A offices currently have a vacancy rate of 22.3%, while 15.4% of Grade B space across the city is vacant.
Durrani concluded, “Activity in Abu Dhabi’s occupier market is expected to remain subdued with new take-up likely to continue being driven by public sector entities and smaller domestic businesses. The latter are looking to capitalise on the weaker conditions by consolidating operations, or upgrading offices, where possible, but average space requirements remain relatively small amongst this cost-conscious cohort, who will find Prime rents remaining firm.”
Read the Dubai report here | Read the Abu Dhabi report here
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For all media & PR enquiries, please contact:
Thomas Farmer, Thomas.Farmer@me.knightfrank.com , +971 56 611 6368
About Knight Frank
Knight Frank has grown to become the world’s largest privately owned global property agency and consultancy company and has a strong presence in the Middle East with offices in Dubai, Abu Dhabi, and Saudi Arabia.
Together with its New York-based affiliate Newmark, Knight Frank has an impressive global footprint network across 57 territories, 488 offices and over 20,000 property professionals and as the world’s leading international property consultant, they continue to build on their long-term global presence across the residential and commercial property and service sectors.
For further information about Knight Frank, please visit www.knightfrank.com or www.knightfrank.ae
© Press Release 2021
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