Bargain rents drive businesses back to uae

With the latest figures from the Real Estate Regulatory Agency showing rents in Dubai have plummeted by as much as 30%, it's easy to see why businesses with a Middle Eastern focus are now reconsidering the emirate as an amazing bargain. In the wake of the recent political unrest in nearby Bahrain and Egypt, stablelocations to set up shop in the region are becoming more and more scarce, and commercial tenants are returning to the Emirate in droves - for prices as much as a third cheaper than what they would have paid at the height of the boom five years ago.

"Demand is being led by the financial and professionalservices sector and continues to focus on single landlord-owned buildings", says CB Richard Ellis's head of UAE research & consultancy, Mat Green. The property advisory firm is seeing a strong recovery in commercial real estate activity in Dubai's city centre. "With rental rates now becoming so much moreattractive, we are seeing an increasing number of occupiers looking to relocate back to the CBD, exploiting favourable condition to secure high quality office accomodation at a fraction of rents once demanded."

In a win for buy to let and commercial investors,tenants are now signing on for increased periods of time, so although the rental yields are lower, they're also guaranteed for up to 10 years. "Elongated terms of between five and 10 years are now becoming more prevalent, as landlords and tenants seek to reduce their risk exposure", says Green.

Meanwhile, new Grade A office developments have alsoboosted commercial property demand in Abu Dhabi, with many of the upcoming office premises scheduledfor completion this year on their way to being full. "We are already seeing significant interest from occupiers of all sizes seeking to secure some of the new office buildings available in 2011, such as International Tower, HQ and Al Sowwah Square", said Green.