The Dubai Government’s recent announcements to promote foreign investment and investor confidence is likely to boost demand in the city’s office market in the medium term, according to consultants JLL.
Its latest report said the reduction in the fee charged on businesses by the Dubai Municipality from 5 percent to 2.5 percent and the relaxation of regulations to allow 100 percent foreign ownership in businesses located outside of free zones will stimulate demand and support the office market.
“These new government announcements should help improve market sentiment and have the potential to directly increase investment and office occupancy across the emirate. The potential surge in foreign investment, particularly from businesses operating in the non-oil sector, could ultimately lead to a boost in demand for quality commercial space,” said Craig Plumb, head of research, JLL MENA.
The report said that although there were no office completions during the second quarter of 2018, the availability of space increased across the city’s central business district, with around 10 percent of the current stock being vacant.
This is favourable to tenants, providing them with an increased choice of potential premises in a market where demand for quality space remains high, said Plumb.
He added that the government’s strategy to attract foreign investment was further demonstrated by Dubai retaining its position as the most transparent real estate market in the region.“The increased transparency, coupled with new initiatives to attract further foreign investment paint a positive outlook for Dubai’s real estate sector overall,” he noted.
JLL’s Q2 report also said that although the retail market continues to face downward pressure in Dubai, the longer-term outlook is positive, supported by the hospitality market, which is expected to receive an influx of visitors, particularly during the Expo 2020 event.
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