Office rents rise 14pc in Abu Dhabi
ABU DHABI - Demand for office space in the capital continues to be high as rents have increased by 14 per cent in the second quarter of the year, a report said.
According to property management company Asteco, villas and residential compounds are being converted to offices to absorb some of the demand, most notably in the Khalidiyah area. Under the circumstances, businesses have no other option but to set up their offices in Al Ain or in the outskirts of Dubai.
"Over the last three months, office rental rates have increased across the board by nearly 14 per cent," the company said.
Asteco said Defence Street witnessed the highest increase of 31 per cent with rents between Dh1,200 and Dh3,000 per square metre. This area, previously a military zone, is currently being re-developed with residential villas, offices and supporting retail.
Khalidiyah is also showing an increase of 28 per cent from last quarter. Rental rates in this area start from Dh1,500 reaching Dh3,500 per square metre, depending on the quality of the building and its facilities. However, similar to the residential market, landlords are pushing prices up to take advantage of the lack of supply regardless of the standard of the offices, the report said.
"The Khalidiyah area is likely to see rents continue to rise due to new commercial buildings being developed," it added. One particular example is an inverted pyramid building with 7,900 square metres of office space, which will offer quality offices and facilities.
Meanwhile, another property management company said present trend of tight office space is likely to continue for another two to three years.
Rebekah Savage, manager at Foundation Property Management Company, told Khaleej Times that present scenario of squeezing availability of office space is likely to persist in coming days.
According to estimates of Abu Dhabi Commercial Properties (ADCP), Ms Savage said that there are 250 buildings in and around Abu Dhabi City Centre are due to be knocked down. She further said 750 buildings to be built in and around Abu Dhabi and Al Ain, however, there are no estimates for the creation of more commercial space in the capital.
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