Despite the global economic uncertainty and the increased volatility in financial markets, commercial real estate sector in 2016 shows good signs of growth in almost all global countries, according to Global Office Index by JLL consultancy.
In fact, in the first quarter of 2016, JLL recorded the fastest growth of rental rates in the global office real estate rental sector in four years. In 95 countries monitored by JLL, average annual office rentals increased by 3.6%.
But in Dubai, compared to these figures, there was a most powerful upsurge in prices for offices recorded in Q1. The vacancy rates for office space in areas such as Business Bay, Bur Dubai, Deira, DMCC, DIFC and JLT are rapidly declining. During the first quarter of 2016, according to JLL, the cost of renting an office in Dubai increased by 20%.
Vacancy rates have the greatest influence on the rentals growth in free economic zone DIFC, whereas in the rest of the Dubai business districts rental prices are more resistant to changing market conditions.
At the end of last year imexre.com reported on CBRE's data, according to which Dubai was ranked 20th in the list of the world's biggest cities with highest office rentals, for office rentals in Dubai at that time were almost three times lower than in London, the leader of the rating. However, even today, despite the increase in rates, which undoubtedly points to the increased attention of the world business to Dubai, the emirate still remains quite an affordable region for establishing new office branches and for registration of new business in the area.