Latest news with #rental growth
Arabian Business
16 hours ago
- Business
- Arabian Business
Abu Dhabi office market strengthens with record occupancy, rental growth: Report
Abu Dhabi's office market recorded sharp rental and occupancy growth in the second quarter of 2025 as demand for Grade A space outpaced supply. According to Savills' latest Market in Minutes report, the emirate's non-oil economy grew by 6.1 per cent year-on-year in the first quarter of 2025, contributing more than 56 per cent of total GDP. Abu Dhabi office market booms The Central Business District (CBD) saw a 42 per cent year-on-year increase in rental rates, while Outer CBD rents rose 18 per cent. City Gate Tower and Abu Dhabi Global Market (ADGM) recorded annual rental uplifts of 43 per cent and 30 per cent respectively, with ADGM rents ranging from AED 2,800 to AED 3,500 per square metre per year. Stephen Forbes, Head of Abu Dhabi at Savills Middle East, said: ' Abu Dhabi continues to attract a diverse mix of regional and international occupiers, and the recent expansion of ADGM into Al Reem Island has only amplified that appeal. As more global firms establish a presence in the capital, we're seeing a clear shift toward larger, high-quality spaces. Demand remains strong, particularly across financial services, consulting, and tech, a sign of growing business confidence and Abu Dhabi's rising stature as a global commercial hub.' In the first quarter of 2025, ADGM completed its jurisdictional expansion to Al Reem Island, adding nearly 500,000 sq m of office space. By the end of that quarter, the total number of operational firms within ADGM rose to 2,781, a 43 per cent increase from a year earlier, while financial services entities grew by 26 per cent. The workforce on Al Maryah Island expanded by 17 per cent to over 29,000 employees. Approximately 100,000 sq m of new office space is expected to be delivered this year, including projects in Masdar City Square and Yas Place. Another 100,000 sq m is planned by 2027 from projects such as One Maryah Place and Saadiyat Business Park. Savills expects continued upward pressure on prime rents through the remainder of 2025.
Arabian Business
21-07-2025
- Business
- Arabian Business
Dubai real estate: Office rents remain 36% higher year-on-year in Q2 2025: Report
Dubai's office sector sustained momentum in the second quarter of 2025, supported by restricted supply and continued international demand, according to Savills' latest market report. 'Rents appear to have levelled out in some submarkets with 11 of the 23 submarkets tracked by Savills having 0 per cent quarter-on-quarter change in rental rates, likely a result of many tenants adopting a holding pattern and limited market movement. Rents remain up 36 per cent year-on-year on average,' the report said. Submarkets such as Dubai Silicon Oasis, Barsha Heights, Business Bay and Studio City recorded rental growth of 10 per cent or more in Q2 2025. Dubai sees rise in foreign company registrations, led by India and Pakistan The Dubai Chamber of Commerce reported that India led overseas company registrations in Q1 2025, with 4,543 new businesses. Pakistan followed with 2,154 registrations, and Egypt with 1,362. Other countries in the top 10 included Bangladesh, the United Kingdom, Syria, Jordan, China, Türkiye, and Iraq. According to the report, 'most new leases are being signed by new market entrants or by companies expanding their footprint,' with 44 per cent of Savills' Q2 enquiries for spaces ranging between 10,000 and 20,000 sq ft. Enquiries for units below 10,000 sq ft represented 38 per cent. Renewals accounted for 41 per cent of transactions, followed by relocations (29 per cent), new entry (12 per cent), surrender (12 per cent), and expansion (6 per cent). Landlords are showing preference for tenants with regional track records or international presence. 'Landlords remain mindful of a covenant strength, tenant profile and alignment with existing occupiers to ensure a balanced tenant mix,' the report said. Occupiers are also favouring buildings with established reputations or institutional landlords. In Q2 2025, 84 per cent of Savills' transactions involved companies in financial services, consulting, and technology and media sectors. Many occupiers are adopting a wait-and-see approach due to limited availability of sustainable or ESG-compliant space. Some tenants are securing right of first refusal on additional space within their current buildings, enabling limited expansion while retaining RERA protection. 'Flexible space continues to be used to accommodate supplementary requirements,' the report added. Approximately 1 million sq ft of new stock is expected in late 2025 and early 2026, with pre-commitments absorbing much of the pipeline. Key upcoming developments include Wasl Tower, Immersive Tower, DIFC Square, Sweid One, Uptown Towers, and Capital One. Developers traditionally focused on residential projects are exploring strata office buildings, which could shift supply dynamics and support the Dubai 2040 Urban Master Plan 's vision of a 20-minute city. At a macro level, Oxford Economics revised the UAE's GDP growth forecast to 5.1 per cent for 2025, up from 4.7 per cent, citing oil sector recovery and non-oil GDP growth. However, S&P Global's UAE PMI fell to 53.3 in May, the lowest since September 2021, indicating potential pressure on short-term sentiment. President Trump's visit in May 2025 and the launch of the US-UAE AI Acceleration Framework is expected to strengthen bilateral ties and support further trade and investment flows. Business Bay, Silicon Oasis drive Q2 rental increases in Dubai Submarkets with stable quarter-on-quarter rental rates in Q2 2025 included Healthcare City, Downtown Dubai, Al Barsha, JLT, Dubai Marina, Sheikh Zayed Road, DAFZA, Garhoud, Bur Dubai, and Dubai Production City. Rental growth was highest in Dubai Silicon Oasis (13 per cent), followed by Al Barsha Heights (12 per cent), Business Bay (10 per cent), and Dubai Studio City (10 per cent). Other increases were recorded in Dubai Design District (9 per cent), Deira (8 per cent), Dubai Investment Park (7 per cent), One Central (6 per cent), and Dubai Science Park (5 per cent). TECOM DIC/DMC/DKV and DIFC saw more modest increases of 3 per cent and 2 per cent respectively. New areas such as Dubai South and Expo City are expected to see more demand due to greater availability, affordability and improved access. 'Geopolitical uncertainty may also influence activity, as some European and US firms pause overseas investment due to domestic economic pressures and regional volatility affecting sentiment. Demand is expected to grow in submarkets such as Dubai South and Expo City, driven by greater space availability, affordability, and improved accessibility,' the report said.
Bloomberg
21-07-2025
- Business
- Bloomberg
Hamptons Lowers Outlook on UK Rental Growth as Home Demand Cools
Rental growth in Britain's housing market this year will be weaker than previously anticipated because of a 'faster-than-expected' softening in demand, according to revised forecasts from Hamptons. The broker lowered its prediction for 2025 rental growth to 1% from the earlier 4.5%, and trimmed expectations for the following two years. The downgrades have been driven by the transfer of demand from the rental sector to the sales market as mortgage rates have fallen, as well as a weakness in the labor market, Hamptons said.
