Dubai suffers from shortage of 'quality' office space: expert

Despite the fact that there remains a high rate of vacancy in Dubai's commercial property sector, there is a shortage of quality office space, which remains highly sought-after, an expert has said.

“Although Dubai’s market is likely to experience a supply overhang, there is still a shortage of good quality office space,” Porush Jhunjhunwala, Head, Commercial Sales and Leasing at Better Homes told Emirates 24|7.

Although the vacancy rate for commercial spaces in Dubai is much higher than some other global cities, the choice for a good quality office space in the city remains limited as fresh supply of quality office spaces are not flooding the market, he said.

"We still see good occupancy levels in the leasehold areas such as Deira, Bur Dubai, and CBD. The vacancy rates in CBD (between Trade Centre and Downtown Burj Khalifa), which is a mix of leasehold and freehold buildings, are significantly lower,” Jhunjhunwala pointed out.

Nevertheless, an impending supply of commercial space will add to the already high vacancy levels in Dubai's office space, he said. “Dubai’s office vacancy level is projected to rise purely because of the new supply which is coming into the market. The vacancy level will rise considerably in freehold areas such as Business Bay, Jumeirah Lake Towers and Dubailand as majority of the projects have been handed over after the downturn and some are still due for handover," he said.

Providing a global comparison of vacancy levels, he said that the emirate's vacancy levels far outstripped other major cities across the world. “The current vacancy in Dubai stands at 50 per cent and according to Bloomberg business week, the vacancy in other big cities like New York stands at 12 per cent, Toronto at 10 per cent, London at 14 per cent, Mumbai at 16 per cent, Hong Kong at 7 per cent and Tokyo at 6 per cent,” Jhunjhunwala said.
 

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