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Rents of office space units in Al Majaz and Al Soor areas continue to perform the best in Sharjah, according to Cluttons' latest study on the emirate's commercial market.
Unlike Dubai where office rents have shown around 10 per cent increase in the first quarter of 2014, Sharjah has registered a slight dip of 2.6 per cent.
Annual office rents in Al Soor are pegged at around Dh55 per square foot, while the rates hover between Dh60 and Dh75 for office space in Al Majaz. The dip in rents is attributed to the increase in supply and lower demand from large international occupiers.
Most of the demand for office space in Sharjah focuses on smaller office space ranging from 1,000 square feet to 1,500 square feet. According to experts, the requirement for small office space is going to witness a big rise in the next few months, prompting a substantial rise in rents. The supply in this segment is considerably less than the market demand.
Some landlords with large shell and core space are exploiting the market conditions by carrying out partial fit-outs, leasing smaller units. It has also been observed that many of the residential premises have been converted to office spaces.
Sharjah has been the preferred destination of small and medium scale enterprises in the UAE. There are around 45,000 SMEs estimated to be operating from the emirate, drawn by its affordability factor.
Going by the current market trends, the annual rent of Grade A office space in Dubai is around Dh180 per square foot, more than double the rate in Sharjah.
The market for office rent in Sharjah is heavily dependent on SMEs operating within the real estate, manufacturing, and the financial and business services sectors.
• Office rents in the emirate of Sharjah saw a 2.6% dip in Q1 2014
• Al Soor and Al Majaz are the most preferred office destinations
• There is a strong preference for space from 1,000 to 1,500 sq.ft.
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Source: S. Dhar, Special to Properties
The writer is a freelancer