Abu Dhabi is showing promising growth in commercial and office spaces, surveys have shown.
"Rental rates for Grade A office space saw small increases of up to four per cent in second quarter for fitted, and shell and core offices, respectively,” says a study by a leading property advisory firm Asteco.
Landmark Tower, handed over in the third quarter of 2013, achieved net effective rental rates estimated at Dh1,700 per square metre for fully fitted space located on the Corniche.
Rental rates at Sowwah Square remained unchanged in the last 12 months. Although there is a healthy tenant interest, leasing of the development has been on hold due to confirmation of the free zone status. The property advisory firm believed that with the free zone status leasing will restart and an increase in rental rates is likely.
The market for Grade B office space, whether recently built or existing, remained slow with no change in rates compared with the previous quarter. This was mainly due to no significant additions to supply in second quarter of 2014. This extended period of rent stability has become a relief to landlords under sustained pressure since 2009.
"We anticipate that the removal of the rent cap could, over time, lead to companies that had remained where they are for years due to low rents to relocate to a better quality Grade B office space,” Asteco report for second quarter of 2014 said.
Meanwhile, Abu Dhabi will add 778,000 sqm of retail space over the next three years, which represents eight per cent of the total new shopping space (9.8 million sqm) opened in 2013 in 180 cities globally.
The figures were revealed by Bassam Saleh, marketing manager, Bawadi Mall, the five-year old mega shopping mall in Al Ain, based on a global study conducted by property adviser CBRE.
The study also says that a total of 39 million sqm of shopping centre retail space is currently under construction in the world's biggest cities, with Abu Dhabi having more retail space under development than anywhere in the Gulf.
Saleh says: "It does not come as a surprise to many that Abu Dhabi has the largest retail space under development in the GCC, because the capital of the U.A.E. has been taking firm steps in becoming a world class city. Malls in the Emirate have standards that are on par with leading shopping destinations in the world, such as Paris, London and New York. Visitors feel they are in a five-star shopping arcade, in terms of services, ambience, promotions, outreach programmes and staff in stores and management.”
Source: Khaleej Times