With the level of new supply of office space remaining low, prime rents in Dubai were up 23 per cent in the third quarter (Q3) of the year compared to the corresponding period of 2013, a report said.

Although new enquiries for office space picked up in Q3 2014, these did not fully convert into actual demand, resulting in a two per cent increase quarter-on-quarter, added the Dubai Office Research Report released by Knight Frank, a global real estate consultancy.

Year-on-year, in Q3 2014, six out of the 13 districts tracked by Knight Frank in Dubai saw double-digit growth in prime rental values.

These included Business Bay (35 per cent), Tecom C (31 per cent), Festival City (26 per cent), Emaar Square/Downtown (23 per cent), Bur Dubai (13 per cent) and Jumeirah Lake Towers (10 per cent). On the same basis, however, rents in Dubai International Financial Centre (DIFC), Media City, Internet City, Knowledge Village and Deira saw no change.

At 18 per cent, the prime office vacancy rate for Dubai held steady for the second consecutive quarter in Q3 2014, but was down from 20 per cent in Q3 2014.

However, lower availability compared to a year earlier does not come as a surprise, said the report.

After all, activity in the non-oil private sector continues to grow robustly; the HSBC UAE Purchasing Managers Index reached 57.6 in September - well above the theoretical no-change mark (50), indicating a healthy rate of expansion. This in turn appears to be providing firms with the impetus to expand, the report said.

By the end of Q3 2014, total office stock reached 7.5 million sq m in Dubai, according to the report.

“Additionally, our analysis of schemes currently under construction shows that the amount of office floor space will increase to 8 million sq m and 8.2 million sq m in 2015 and 2016, respectively,” the report said. – TradeArabia News Service