Knight Frank's Q1 2018 Abu Dhabi Commercial Market Review said that this is possibly the case going forward in the UAE capital's office market.
According to a new report, the launch of VAT has caused effect on the economic occupier market in Abu Dhabi.
Knight Frank's Q1 2018 Abu Dhabi Commercial Market Review said that this is possibly the case going forward in the UAE capital's office market.
The report said that more than 195,000 square metres of stock is drafted to be delivered in Abu Dhabi; but only 70,000 sq m will be brought to market and the remainder being delayed to 2019.
Taimur Khan, senior analyst, said, “The vast majority of this new supply is not considered to be prime therefore its impact on the prime market is likely to be limited.”
The report said that the prime office rents in Q1 were registered at AED1, 800 per sq m per annum on average, which went down by 1.6 percent compared to the year-earlier period.
The report also said that Citywide office space validated sharp declines in rents of up to 12.9 percent.
Knight Frank said Abu Dhabi’s GDP decreased by 2.7 percent in the year to Q3 2017. Even though the performance in the oil sector was weak, the non-oil sector has remained strong.
It added that Abu Dhabi’s office market remains unfavourable with further falls in rental rates expected over the coming year.
