Office space in Dubai, Abu Dhabi to double by 2015

Office space in Dubai and Abu Dhabi will almost double to 80 million square feet and 38 million square feet by beginning of 2015, according to Landmark Advisory.

Commercial space in Dubai and Abu Dhabi, early 2010, stood at 41 million square feet and 18 million square feet, respectively, Jesse Downs, director of research and advisory services, told Emirates 24|7.

Last week, Jones Lang LaSalle said Dubai is the fastest growing office market in the world on a per capita basis, with the total area of occupied Grade A quality office space increasing by 2.8 square feet per capita since the beginning of 2008.

As for Abu Dhabi, JLL said the capital has about two million square metres (21.5 million square feet) of total office stock with an additional 1.2 million square metres likely to enter market by end-2012.

In May, CB Richard Ellis said it expects around 3.42 million square metres of new office space being added between 2010 and 2012, from the current 4.7 million square metres.

Colliers International, during the same month, said it expects 2.5 million square feet of office space to enter the market between now and end of 2011, taking the total space to 6.4 million square metres.

Asked if Abu Dhabi will outpace Dubai in sale price and rental decline, Downs said: "Fragmented ownership is more pervasive in Dubai, which leaves price and rent trends more responsive to changing market dynamics. However, in Abu Dhabi, ownership is more centralised and price trends, especially rents, take longer to adjust to market dynamics."

However, on Wednesday, Landmark said the residential average vacancy in Dubai and Abu Dhabi would gradually increase to peak at 12 per cent in 2012 from 10 per cent in 2010.

Downs told this website that the vacancy rates are calculated assuming "interchangeability" between both markets, which means combing supply and demand of both cities to understand demand patterns and vacancy rates.

"In reality, the vacancy rates are higher in Dubai and lower in Abu Dhabi. However, those areas in Dubai benefit from Abu Dhabi commuter demand experience vacancy rates more in line with these figures."

Asked if the company has revised supply projection after the government of Dubai's update on London Stock Exchange on 495 projects being cancelled, in process of cancellation, or put on hold, Downs said their supply estimates are based on quarterly site visits, which monitor the actual progress of projects across Dubai.

"Therefore, in most cases, our estimates have already accounted for these official updates," she added.
 

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