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The continued rollback in the oil and gas sector is telling on Abu Dhabi’s office real estate fortunes, placing 13th among global cities with the largest declines in commercial occupancy costs in the 12 months to the first quarter of 2016, based on the latest rankings from CBRE. A prime office carries an average rental of Dh1,800 a square metre.
Dubai, in comparison, fared better with the property consultancy placing it at the 23rd spot among cities with the most expensive office operational costs. Rents were Dh280 a square foot.
Hong Kong (Central) and London-Central (West End) had the costliest offices during the period being tracked, while the Finance Street and CBD in Beijing were placed third and fourth.
Across the board, office occupancy costs across key cities are retaining their upward mobility. “On average, in the year through the first quarter of 2016, prime office occupancy costs rose 2.4 per cent, the same annual global rate logged in the year through the third quarter of 2015; so the economic jitters in early 2016 have yet to impact prime office market rents,” the report states. “In the Americas, occupancy costs grew at 2.3 per cent year-over-year, a slower pace from the 3.1 per cent annual growth recorded through the third quarter of 2015.
“Asia-Pacific office occupancy costs rose 2.7 per cent year-over-year ... EMEA’s 2.1 per cent year-over-year growth rate in the first quarter of 2016 was about the same as the 2.2 per cent pace seen in the third quarter of 2015.
“These rates of occupancy cost growth may seem low compared to the higher pace of growth in some of the individual markets where demand for space is very high. However, it is important to keep in mind that inflation is low, so 2.4 per cent represents real growth in office occupancy costs, and is significant for both office users and investors.”
Source: Staff Report, gulfnews.com