Analysts from several of the world’s leading commercial real estate companies expect to see typical rental costs associated with offices in the Middle Eastern city continue to fall away from the peaks they reached in late 2008.
Several office space development schemes that were expected to complete last year are only now coming onstream, which means 2011 will see plenty of new floor space made available and would-be renters in a strong position to negotiate a better deal.
A report from the UAE-based National newspaper suggests that local analysts are expecting to see more than half a million square metres of new office space introduced into the Abu Dhabi market this year, including a number of high-profile schemes in the central business district.
With many current occupiers of space in the city only tied to a single-year arrangement, there is reckoned to be plenty of scope for renegotiation and likely to be a considerable amount of office space switching in the Emirate’s capital this year.
“We expect further downward pressure,” said Matthew Green, head of CB Richard Ellis’ office in the UAE. “A lot of the new projects we expected in 2010 will happen this year,” he made clear.
Always ambitious in terms of attracting visitors and businesses to the Middle East, Abu Dhabi’s leaders, and its tourist board in particular, are aiming to bring close to two million hotel guests to the city over the course of this year, Gulf News recently reported.
Editor’s notes: It was reported in February 2023, that Abu Dhabi was showing signs of recovery following the pandemic and showing a rebound in rents.
Following a year of high economic expansion (8.8%) and high employment growth, office rental rates in half of the prime office submarkets experienced growth ranging from 3.5% to 12% in the last year.
The Abu Dhabi Freezones continue to command the highest office rent at AED 1,880 per square metre per year and is closely followed by the Corniche Area at AED 1,675 and then Capital Centre with prime office rents at AED 1,367 per square metre.
Prime office space in Abu Dhabi Mainland is AED 1,138 per square metre per annum and to rent best-in-class office space at Al Reem Island would cost AED 950 per square metre.
Employment rates are expected to rise to levels higher than they were at pre-pandemic by the end of 2023 which will immediately put upward pressure on headline rents.