As part of its monthly networking event, Dubai Property Group (DPG), Dubai’s only real estate professional association, today hosted a seminar to discuss Dubai commercial property market and the relationship between developers, occupiers and investors.
Mr. Simon Townsend, Director of CB Richard Ellis, outlined to DPG members and other high ranking real estate professionals, the direct relationship between increased commercial space and the investments market.
“It’s our pleasure to have a representative of such a well-known consultancy firm, speaking at our monthly event,” said Adel Lootah, the Executive Director of Dubai Property Group. “Many global corporate firms are shifting their regional and sometimes global headquarters to Dubai. At this event, we tried to highlight the main challenges that are facing the developers and investors operating in the commercial property market.”
With the emergence of Dubai as a regional and global trading hub attracting international tenants, the need for commercial space has become great, whether it is offices, showrooms, warehouses or any type of commercial property. Changes in the legislative framework, with the introduction of the new property law, has also enabled more investors to have access to this market through either direct or indirect investment vehicles.
There is much debate, however, about the supply vs the demand characteristic of Dubai office market, at times, it is widely reported that Dubai has zero percent occupancy in this prime office sector.
Mr. Townsend explained, “It’s difficult to predict the demand for commercial space in Dubai, as it is used for both, commercial and residential use. In general, according to circulated reports, it’s predicted that the size of the office market will rise to about 6.5 million sq m – 8 million sq m (70 – 86 million sq ft) in 2010 from 2.79 million sq m (30 million sq ft) in the first half of 2007.”
Mr. Townsend also highlighted that the demand for commercial offices, has been driven by changes in local regulations, on one hand, and the changes in trading environments and markets globally. “What the market needs now is being able to acquire 15-20 year leases to strong covenants, with clearly defined rental provisions. The security of title and the issues related to security and protection of the landlord and tenant relation should also be clarified,” he added.
“At this time when new businesses are continuing to set up or expanding, the demand for office space and retail space are growing. New projects such as Business Bay and the Dubai International Financial Centre (DIFC) are bringing in increased supply to the commercial property. With the increase in supply and the more stringent specifications being required by global occupiers, it is essential that the occupiable space is designed to confirm to the demands of tenants,” concluded Mr. Townsend.
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