Dubai Commercial Leases dropped by 64 per cent

A report has been generated by the Investment Boutique and Better Homes on commercial Dubai real estate market. In that report it was studied that for commercial Dubai property sector lease rates are likely to drop in the year 2009 at an average of 64 percent and then in 2010 it would further drop 20 percent. The report authors have realized that now that Dubai property market is very unpredictable, the traditional forecasting techniques cannot be applied on Dubai property market. This industry in Dubai moves from approximate immaturity to regulated fields.

The Department of Economic Development highlighted the figures of new licenses issued. The figures have fallen as the number of licenses issued in Q1 of 2009 has fallen by an average of 21 percent per month compared to the same in Q4 2008. Moreover, the white collar office employees are even predicted to fall in numbers. In the year 2009, they are predicted to fall by 237,286 from 280,088 in 2008. Dubai commercial real estate sector also deals with the fact that there is no central business district in this emirate unlike other property and real estate markets. Since the market is rapidly changing, most of the corporations and multinational companies are renting the offices rather than owing one.

Moreover, as the real estate sector is very un-precise, many landlords have now opted for signing short term leases. Companies have taken office space wherever they could afford over the past three years. With this a new pairing of space and businesses has been developed. In addition landlords are expected to implement various different strategies in order to keep their business in profitable terms. Various initiatives which the landlords might take include parking expansion, rent free periods, and long term contracts. These are some of the strategies which the landlords are expected to implement over the coming quarters in order to maintain their business levels.