Whilst we expect commercial transaction levels to remain below 2015 take up, strong enquiry levels since the start of 2018 suggest there will be a modest increase from 2017. Nevertheless, it is anticipated that businesses and occupiers will continue to carry out greater due diligence and analysis, which will impact decision making times. We also expect a continuing differentiation in pricing expectations between sellers and buyers.
There will continue to be many commercial properties sitting stagnant on the market however if landlords and sellers are willing to adjust to the current market levels, then they should secure occupiers and buyers. We anticipate an increase in the level of occupiers looking to relocate to other emirates in a bid to reduce occupational costs incurred where they are more responsive to the challenges facing many businesses. However, the additional benefits of working within Dubai such as a better legislative and legal framework, more developed infrastructure, working in closer conjunction with suppliers and consumers and easier access to a greater labour force will continue to outweigh any occupational cost savings which may be achievable in other emirates.
Due to the low levels of good quality commercial supply in the well established areas such as Dubai Investments Park and Al Quoz, which have no development land remaining, it is likely that interest in the areas around Al Maktoum International Airport, such as Dubai South and Dubai Industrial Park will increase as occupiers are forced to look at alternative locations to find suitable properties. Prices in free zones are expected to decline as increased supply and high vacancy levels, coupled with rising land rents, continue to compress capital values.
However with an increase in the oil price, Expo 2020, further capital investment in the expansion of Jebel Ali Port on the horizonand the overall maturing of the market, the general sentiment in the commercial market is more positive than it has been for the past couple of years.
* Statistics and reports provided by Property Monitor powered by Cavendish Maxwell.
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