Landlords in Dubai seem to be following a new trend of dividing floors and offering smaller office spaces due to challenging market conditions and uncertainty about companies’ space requirements, according to the Q3 Dubai Real Estate Market Overview by JLL.
The consultancy firm noted that “relatively few” larger transactions had taken place in the office market during Q3 of 2016. Craig Plumb, Head of Research at JLL MENA, explained this shift by pointing to uncertainty of companies “about their staffing and space requirements.”
The JLL report also mentioned “more challenging economic conditions in both Dubai and across the broader region” as a likely cause of companies downsizing their space requirements. After recent successes of landlords dividing up floors and offering smaller spaces, JLL expects more to follow this example.
Rents however remained largely stable, with a 2% year-on-year increase.