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Demand for office space in Dubai has tightened in the first half of the year, affected by the oil price slide and other external factors, according to a Cluttons report. The oil price collapse and the subsequent economic slowdown in the rest of the GCC have hit the emirate's commercial property market, as firms are retrenching staff and reconsidering their future strategy.
Free-zone areas, however, remain in relatively high demand, particularly prime and central areas, which have enjoyed very low vacancy rates of around 5 per cent. Dubai Internet City, Dubai Media City, Knowledge Village, Dubai International Financial Centre and Dubai Design District are among free zones with popular grade A space, according to the report. In submarkets where stocks are of mixed quality and age, such as Shaikh Zayed Road, vacancy rates are closer to 20 per cent.
Rents remained stagnant in the second quarter, with falls recorded in six of 22 submarkets tracked by the report. Most declines have been recorded in areas with higher vacancy rates, particularly second-hand stock such as Garhoud (18 per cent), Al Barsha ( 10 per cent) and Deira (5 per cent). Some submarkets have seen minor uplifts in upper limit rents.
Source: Property Weekly