Dubai Commercial Property to Multiply Threefold
Commercial property in Dubai has a 20 percent turnout at present. This is way high in comparison to the global average of commercial property yield of 6 percent. Dubai property analysts opine that by the year 2010, the high yield will show a downward trend as the expected growth in commercial property units in Dubai is threefold than the present status. Consequently, the yield may even touch the global figures in some years from now.
Dubai commercial property at present has no liquid secondary market and the high rental yields on commercial units in the emirate are due to the selling prices of developments underway in Dubai property market. For a short while, as the demand is outstripping supply of commercial property in Dubai, there will be a boost in the rents.
There has been some sluggishness in the expected increase in rentals this year due to a delay in the completion of commercial property projects in Dubai. However, some parts of Jumeirah Lake Towers, Sheikh Zayed, TELCOM and DIFC are due to be delivered in the property market by the end of 2007. This has been a sustaining force in the Dubai commercial property rental rise.
Today Dubai is hailed as one of the most expensive business cities in the world wherein the average rent for Dubai property amounts to 89 dollars per square foot. With more and more commercial units expected to hit Dubai property market in the coming years, this average will also decline. At the same time, it should be noted that the average of 89 dollars per square foot is quite low a figure when compared to that of other international cities like Moscow, Paris and Hong Kong.
Office rents in Dubai have increased by 40 percent year-to-date. At the same time, the occupancy rates of commercial property units in Dubai are approximately 99 percent. The commercial units in Dubai property market have gradually acquired a crucial role that even old Dubai has witnessed an increase of about 36 percent in commercial rents. At the same time, commercial rentals in new Dubai have increased by 45 percent.
The main reason behind a higher yield by Dubai commercial property units is that while the cost of freehold commercial units has increased, the selling prices still remain at the lowest wrung of the ladder among business cities. So the average figures come at around 400 dollars per square foot, making the rental yields soar up to 20 percent as against a global average of 6-7 percent.
In both old and new Dubai, new Grade A commercial property units have come up recently. The commercial capillaries of the emirate are finding their way into newer locations. Units in off-plan developments in DIFC, Jumeirah Lake Towers and Burj Dubai are being sold for 17 percent higher prices as compared to figures at the beginning of 2007.
All in all, it is a boom time for Dubai commercial property market. At present, at least.
Dubai commercial property at present has no liquid secondary market and the high rental yields on commercial units in the emirate are due to the selling prices of developments underway in Dubai property market. For a short while, as the demand is outstripping supply of commercial property in Dubai, there will be a boost in the rents.
There has been some sluggishness in the expected increase in rentals this year due to a delay in the completion of commercial property projects in Dubai. However, some parts of Jumeirah Lake Towers, Sheikh Zayed, TELCOM and DIFC are due to be delivered in the property market by the end of 2007. This has been a sustaining force in the Dubai commercial property rental rise.
Today Dubai is hailed as one of the most expensive business cities in the world wherein the average rent for Dubai property amounts to 89 dollars per square foot. With more and more commercial units expected to hit Dubai property market in the coming years, this average will also decline. At the same time, it should be noted that the average of 89 dollars per square foot is quite low a figure when compared to that of other international cities like Moscow, Paris and Hong Kong.
Office rents in Dubai have increased by 40 percent year-to-date. At the same time, the occupancy rates of commercial property units in Dubai are approximately 99 percent. The commercial units in Dubai property market have gradually acquired a crucial role that even old Dubai has witnessed an increase of about 36 percent in commercial rents. At the same time, commercial rentals in new Dubai have increased by 45 percent.
The main reason behind a higher yield by Dubai commercial property units is that while the cost of freehold commercial units has increased, the selling prices still remain at the lowest wrung of the ladder among business cities. So the average figures come at around 400 dollars per square foot, making the rental yields soar up to 20 percent as against a global average of 6-7 percent.
In both old and new Dubai, new Grade A commercial property units have come up recently. The commercial capillaries of the emirate are finding their way into newer locations. Units in off-plan developments in DIFC, Jumeirah Lake Towers and Burj Dubai are being sold for 17 percent higher prices as compared to figures at the beginning of 2007.
All in all, it is a boom time for Dubai commercial property market. At present, at least.
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