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Dubai, Abu Dhabi office rents seen falling further
Tuesday, 20 April 2010

Office rents in Dubai and Abu Dhabi are forecast to fall further in 2010, bucking a rebound that is expected in a majority of markets around the world, Knight Frank said on Tuesday.

The property company's Global Report 2010 said the UAE cities were among only a quarter of cities surveyed that saw further rental declines this year.

About 75 percent of cities will either hold firm or see office rents increase, the report added.

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Abu Dhabi and Dubai currently command the sixth and seventh highest office rents in the world, with Tokyo top of the list.

Singapore saw declines in 2009 of more than 50 percent while Dubai rates fell by 37 percent and Abu Dhabi rents dropped by 6.7 percent, Knight Frank said.

Joe Simpson, head of commercial international research, Knight Frank said: “A quarter of the cities surveyed are expected to see a fall in rents in 2010, but in most cases the degree which rents will decrease will be marginal in comparison to the negative movement seen in 2009.  

"The remaining 75 percent will see rents at worst holding firm, with approximately half expected to show positive rental growth in the year ahead.”

In March, CB Richard Ellis said office rents in the Dubai International Financial Centre (DIFC) were now the second highest across the Europe, Middle East and African region after being less impacted by the global real estate slump.

Its research showed that prime office rents in DIFC in the final quarter of 2009 averaged €819 per sq m per annum ($1,121), second only to London’s West End (€972).


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