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Slowdown Hits Dubai Rents: Asteco

ABU DHABI - Dubai’s office rents have dropped by 11-16 per cent as the global economic slowdown started impacting businesses, according to an analyst at Asteco, a leading property management firm.

The softening of rents came in the backdrop of several Dubai-based businesses gearing up for down-sizing, putting expansion plans and new start-up campaigns on hold, said Andrew Chambers, managing director of Asteco.

Areas affected the most include free zone developments, Shaikh Zayed Road, Bur Dubai and Deira business district. Office rentals at Jumeirah Lake Towers have dropped by 16 per cent when compared to 2008’s third-quarter prices, while Dubai Media City and Deira have seen rentals falling by 11 and 14 per cent respectively.

“Office sales, on the other hand, appear to be more resilient to the downturn as the supply-demand gap in commercial space is still wide owing to delayed delivery of projects at Business Bay. Given the current scenario, Dubai still has great potential for further business development,” said Chambers.

Residential sale prices have also relaxed, according to Asteco’s 2008 fourth quarter research report.

However, areas such as Dubai Investment Park, International City and Discovery Gardens have recorded no change in prices over the last quarter due to growing demand for affordable accommodation.

Downtown Burj Dubai prices have decreased from Dh3,750 in the third quarter to Dh2,700 per square foot in the fourth quarter of 2008, recording a 28 per cent change and Dubai Marina rates have contracted by 18 per cent from Dh2,200 in the third quarter to Dh1,800 per square foot in the fourth quarter of 2008.

“Ultimately, well planned and superior quality projects from reputed developers in prime locations will stand out and command competitive prices.”