Cluttons announced its third-quarter market report for Dubaiís commercial property investment market in 2012, showing an increased investment activity and a modest level of positivity in the office market that means the outlook is one of cautious optimism.
Recent investment purchases made within the first half of 2012 have involved both GCC purchasers and international entities. Recent Dubai Economic Department figures state that Dh22 billion ($5.9 billion) of foreign investment has been injected into the real estate sector in the first half of 2012 alone, with Indian, Pakistani, Iranian and Russian investors dominating the figures.
A surprising number of transactions were recorded during the normally quiet summer months this year, totalling Dh2 billion. Major commercial deals taking place in the DIFC, Tecom and Downtown areas are clear evidence that the UAE is a viable real estate investment option. In the leasing market, such a modest level of positive sentiment has stabilised rents, while occupier requirements seem to be slowly increasing. At the top end of the market, office rents in the DIFC have remained steady at Dh250 per square foot per annum. A similar picture is presented for Grade B space, with rents in Tecom remaining at Dh100 square foot per annum for the past year.
Light industrial, logistics
Meanwhile, Cluttons on Wednesday also released its third-quarter market report for Dubai’s light industrial and logistics market, confirming an improvement in this sector when compared to the same period in 2011.
Enquiry levels are significantly up with existing companies wishing to expand or consolidate operations and new companies looking to enter the market. It is evident that confidence is returning to the sector in the free zone and non-free zone environments. In the last quarter, Cluttons has worked on active enquiries totaling 100,000sqm throughout Dubai.
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