Luxury Real Estate developer DAMAC Properties is guaranteeing an Aston Martin or Mercedes-Benz with properties sold during the Dubai Shopping Festival (DSF). (Photo: Business Wire)
Luxury Real Estate developer DAMAC Properties is guaranteeing an Aston Martin or Mercedes-Benz with properties sold during the Dubai Shopping Festival (DSF). (Photo: Business Wire)

Demand for office space in the capital of the United Arab Emirates (UAE) decreased while energy prices remained muted, real estate service provider said Saturday.

Knight Frank, a real estate service provider, said in an e-mailed statement that the uncertainty was most probably stemming from lower oil prices.

Abu Dhabi harbors seven percent of the world’s known oil reserves and the price for the black gold lost over 50 percent between mid-2014 and the first half of 2015.

Matthew Dadd, the head of Abu Dhabi commercial leasing at Knight Frank, said the Abu Dhabi office market remains subdued in terms of new commercial premises under development.

“The current supply does not solely meet current occupier demand, however, we are still witnessing consolidation of operations and flight to quality,” he added.

The main demand for offices was between 200 square meters and 500 square meters which stood for 50 percent of all inquiries, he said.

He added that demand for office space was led by the financial services industry (which had a 22 percent share in total demand), leisure and hospitality (15 percent) and professional sectors (15 percent).

Real estate research firm CBRE said commercial and residential real estate prices are likely to come under pressure as 1.45 million square meters of new space is set to enter the market over the next three years.

Nevertheless, Abu Dhabi does not face the same pressure on properties like neighboring Dubai where Standard and Poor’s said real estate is expected to fall by 20 percent in value.

Dadd said over the same period, the number of enquiries from the engineering and construction sector has increased, reflecting growing demand stemming from rising infrastructure construction activity.

In addition, the UAE continues to cement its position as a regional financial centre and a hub for trade, transport and tourism.

Earlier in the year, the government of Abu Dhabi launched the financial free zone Abu Dhabi Global Market (ADGM) on Mariyah Island.

The ADGM which shall attract banks and insurance firms from around the world to upgrade Abu Dhabi’s profile as a financial hub. Enditem

Source: Xinhua

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