DUBAI, (AP) — Commercial property prices in former boomtown Dubai in the United Arab Emirates are set to slide even further, consultancy firm Jones Lang LaSalle said in a report on Tuesday.
Although the rate of decline in office rental prices slowed in the second quarter from the previous quarter, they are still poised to fall further because of increased market supply, it said.
“The Dubai commercial property market is becoming more competitive on a global scale as falling rents and increased vacancy make the city more attractive to potential tenants,” the report said.
Commercial rental prices declined 25 percent in the second quarter this year compared with a 45 percent decline in the first quarter, averaging 225 dirhams (61 dollars) per square foot per year, the firm said.
By the end of 2011, 25 million square feet (2.25 million square metres) of additional office space is also expected to enter the market, it said.
“(This) will increase the vacancy rate and place further downward pressure on average rentals,” the Jones Lang LaSalle report added.
Average prime office rentals in Dubai, which saw a six-year economic boom fuelled by skyrocketing oil prices, are now below those in major international office centres of London, Paris, Hong Kong, Mumbai and Moscow, the report said.