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Dubai Faces Shortage of Office Space

ABU DHABI — Dubai is facing severe shortage for office spaces as completion delays particularly in Business Bay, which was scheduled to deliver 1.9 million square metres of office space by the fourth quarter of 2010, versus an actual completion estimate of 435,000 square metres over the same period.

The things are so serious that a recent report by the Colliers International, a real estate management consultants have revised 2010 fourth quarter total cumulative supply forecasts downward from 6.3 million square metres to 4.9 million square metres Gross Leasable Area.

The demand-supply dynamic of Dubai’s office market has driven double digit growth in capital values over the past three years, ensuring a vacancy rate across market that has rarely exceeded two per cent. The government has played a central role in creating both demand and supply side levers for office space through the creation of economic free zone clusters.

Over the past three years transactions in office space investment remain limited due to a continued shortage of primary grade space.

haseebhaider@khaleejtimes.com