UAE office market showed signs of recovery in Q4 2021

  • JLL publishes its 2021 report for the United Arab Emirates

Dubai, UAE: The office market in the UAE showed signs of recovery in the fourth quarter of 2021, after several months of subdued activity, according to JLL’s 2021 year-end report.

In Dubai’s CBD, improved demand for good quality office stock combined with relatively limited supply in this segment resulted in Class A rents increasing by 2% year-on-year to a average of AED 1,712 per m². per year. On the same basis, Class A rents in Abu Dhabi also increased by 5% to an average of AED 1,650 per sqm.

“Pandemic-induced uncertainty about future business terms and shifts in employee preferences have underpinned an increase in requests for flexible space options such as serviced business centers,” Khawar said. Khan, head of research for the Middle East, Africa and Turkey region at JLL. . Occupants also expressed interest in good quality serviced offices in an effort to minimize capital expenditure due to limited budgets.

In the residential market, a “race for space” and the relative affordability of villas and townhouses at the height of the pandemic helped drive the strong recovery in sales prices – a trend that has continued until the fourth quarter of 2021. This was seen in both Dubai and Abu Dhabi. Beachfront developments in Dubai, as well as villa projects in Abu Dhabi – particularly on Saadiyat Island and Yas Island – have seen strong demand from investors and end users.

The retail market saw a recovery in footfall and turnover in the fourth quarter of 2021. This was attributed to various factors, including the success of the UAE’s vaccination program which led to an easing of restrictions, a recovery global travel, as well as the start of the Expo event in October 2021. Due to the uncertain economic climate, retail occupiers continue to lobby for incentives such as rental free periods, capital expenditure contribution for amenities and revenue sharing options.

“Forecasts show that in the UAE, the recovery in tourism and rising employment will support healthy growth in consumer spending over 2022-2023. This in turn should help boost retail sales – which are broadly expected to return to pre-pandemic levels by the end of next year, ”Khan said.

Thanks to the Expo and strong leisure demand, Dubai’s occupancy rate reached 63% at YT in November 2021, up significantly from 40% in the corresponding period last year. During the same period, the city’s average daily rate (ADR) rose 25% year-on-year to $150. Abu Dhabi’s occupancy rate rose to 66% at YT in November 2021, from 60% a year earlier. Meanwhile, the capital’s ADR rose 4% YoY to reach USD 92 on YT November 2021.

“The emergence of the new Omicron Covid-19 variant has caused a wave of travel restrictions in the MENA region and other parts of the world. Therefore, travelers and hoteliers will likely face a long period of uncertainty. Nonetheless, we expect the UAE hotel market to continue its gradual recovery in 2022 as business and leisure travel further improve as key source markets continue to ease travel restrictions, ” Khan concluded.

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About JLL

JLL (NYSE: JLL) is a leading professional services firm specializing in real estate and investment management. JLL is shaping the future of real estate for a better world by using the most advanced technology to create rewarding opportunities, incredible spaces, and sustainable real estate solutions for our clients, associates, and communities. JLL is a Fortune 500 company with annual revenue of $16.6 billion, operations in more than 80 countries and a global workforce of more than 92,000 people as of June 30, 2021. JLL is the brand name and a registered trademark of Jones Lang LaSalle

Incorporated. For more information, visit www.jll.com.

About JLL MEA

In the Middle East and Africa (MEA), JLL is a leading player in the real estate and hotel services markets. The firm has worked in 35 countries in the region and employs over 1,050 internationally qualified professionals in its offices in Dubai, Abu Dhabi, Riyadh, Jeddah, Al Khobar, Cairo, Casablanca and Johannesburg. www.jll-mena.com.

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© Press release 2022

Jose C. Birney