Global office demand highest in UAE
The United Arab Emirates has emerged as the fastest growing region for office space demand, according to a new report from the Royal Institute of Chartered Surveyors (RICS).
The survey states that demand in the Middle-Eastern economic centre has risen to its highest level since 2008, ahead of substantial increases in Thailand, Russia and the United States.
However, the survey also found that the region’s commercial real estate market is currently saturated, with property owners struggling to fill space following the recent construction boom.
RICS found an additional 48% of its UAE members stated that companies were currently looking for further office or retail property investments during the third quarter, compared to companies reporting a drop in demand.
The study took in to account responses from 942 global corporations in comparison to the previous quarter.
Despite the surge in demand, surveyors have reported that there are still more vacant properties than companies seeking to occupy space.
57% of institute members reported an increase in vacant commercial space, compared to 43% participants who reported a drop in vacancies.
This has led surveyors to predict a fall in the value of commercial rents. However, the outlook is brighter than Q2, with increased demand steadying expectations of a major price drop.
Simon Rubinsohn, the chief economist at RICS, said: "The improving economic picture in the UAE is likely to be lifting confidence in the domestic real estate market … Strong growth of key sectors such as tourism, commerce and retail will impact directly on the commercial sphere.
"The results of the survey are reflected by this, with strong gains in both occupier and investment demand. This turnaround is now shifting expectations for rents and capital values, which are no longer projected to fall."