Level of occupier requirements in Dubai's office sector has increased, centred around consolidation of space or as a cost-saving measure, or a combination of both, said a report by Knight Frank Middle East. 

 

Prime, Grade A and citywide Dubai office rents have fallen in the year to Q2, stated Knight Frank in the Dubai Office Market Update for Q2 2020.

 

"Over the latter stages of the last quarter, whilst the level of occupier requirements has increased, the vast majority of activity is centred around consolidation of space or as a cost saving measure, or a combination of both," it added. 

 

Occupiers are also increasingly requesting rent reviews, with many landlords willing to accommodate just cases given the current market backdrop.

 

Data from the Dubai Statistics Centre shows that Dubai’s GDP grew by 2.2% in 2019, up from 2.1% in 2018. 

 

As a result of the Covid-19 pandemic and its impacts on global economic activity, Dubai’s GDP is expected to contract by 7.4% in 2020. According to forecasts from Oxford Economics, Dubai’s GDP is not expected to return to its 2019 level before 2022.

 

Employment in Dubai grew marginally by 0.6% in 2020 according to data from Oxford

 

Economics. Given the challenging economic backdrop, employment is set to contract by 9.1% in 2020. 

 

If Dubai’s economy recovers as expected, employment is set to register growth rates of 6.7% and 5.1% in 2021 and 2022 respectively, with employment returning to its pre-Covid level by 2022.

 

Taimur Khan, the associate partner, said: "The depth of the contraction and rate of recovery will be very much dependent on the rate at which the global economy and global mobility returns to some form of normality."

 

"These factors will underpin demand and activity in the hydrocarbon, travel and tourism and wholesale and retail trade sectors, which all have direct or indirect impacts on Dubai’s economy," stated Khan.