The Royal Institution of Chartered Surveyors Global Commercial Property Monitor Q1 2024 found that the UAE continues to demonstrate some of the strongest sentiment globally in its commercial property sector. Overall tenant demand stood at a very healthy +45%, exactly the same as the prior quarter.
UAE commercial property is expected to grow further as office, industrial and retail markets see high demand. Overall tenant demand stood at a very healthy +45%, exactly the same as the prior quarter. UAE commercial property The office sector continues to lead the market in demand with an especially strong +60 per cent, while industrial and retail demand is also firmly positive (+34 per cent and +41 per cent, respectively).
When looking at the national level data across the region, the UAE stands out, witnessing a further improvement in both Occupier Sentiment Index (OSI) and Investor Sentiment Index (ISI) readings during this quarter, climbing to +38 and +30, respectively (from +27 and +16). Looking to the future, both rental values and capital value expectations remain firmly strong, and similarly, sentiment towards investment enquiries is positive across commercial property sectors. A very supportive sign is that a majority, 54 per cent of respondents, think the market is still in the middle of an upturn phase and is yet to reach its peak.
According to professionals in the UAE, demand remains particularly high in the Abu Dhabi free zone (ADGM), with proposals for new prime office space moving forward. Strong demand remains for regional representative offices for international corporations. An increase in demand for logistics and data centres was also found. The UAE is seeing a limited number of people repurposing office space, as demand remains high, with only 3 per cent seeing a significant amount repurposing, 52 per cent seeing modest repurposing and 45 per cent seeing none.
They are also not seeing tenants looking to downsize with the majority, 82 per cent, seeing no change or a decrease in those looking to reduce their office footprints. The UAE, similarly, to other strong markets in the region, is limited only by rising costs brought by white hot demand. Regardless, the outlook for commercial property in the nation remains extremely positive and sustainable for the foreseeable future.
