Commercial Space – Dubai faces shortage
Our studies estimate that currently some 1.72 million sq ft of commercial space is available in Dubai with a pent-up demand for 7.29 million sq ft. The commercial sector has gained momentum among investors and end-users as the rate of availability of Grade A office spaces is even lesser than 1%.
It is worth noting that the rate of office occupancy in Dubai has touched an all-time high of almost 98-99% with zero vacancy levels.
Our research reveals that more than 90% of Dubai's buildings designated for commercial utility are either under construction or recently launched; with most of the developments adopting 'strata' sales.
According to Dubai Strategic Plan 2015, Dubai plans to focus on the expansion and development of the trade and commerce. The emirate aspires to carry forward its current economic performance as the trade sector has experienced the highest increase in GDP in last few years. Dubai wishes to sustain a real GDP growth rate of 11% p.a. for next 10 years and increase the real GDP per capita to $44,000 in 2015.
The issued by the World Conference on Trade and Development (UNCTAD), UAE has attracted a whopping USD 12 billion as the inward Foreign Direct Investment (FDI) in 2005. UAE topped the GCC countries by showing a growth of 43%. The UAE will remain attractive to international investors due to 100% foreign ownership in the free trade areas.
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According to the International Monetary Fund, the UAE had the lowest debt-GDP ratio in the Arab world during 1998-2002 and it remained among the lowest in the following years. The UAE debt-GDP ratio stood at around 5.5% during 1998-2002 and grew to nearly 6.6%t in 2003 and an average 8% during 2004-2006. The ratio was estimated at around 7.7% in 2007. The second-largest Arab economy released its federal 2007 inflation data showing price rose 11.1%, their fastest pace in at least 20 years. Adoption of free market principles - No intention to introduce Income Tax Dubai's economy is open and free thereby attracting investors and business. The government control and regulation of private sector activities is minimal. The authorities never considered borrowing or introducing income taxes for two reasons: namely, the country's petrodollar income was swelling and a gigantic overseas investment empire was taking shape. The surge in oil prices over the past 3 years turned the deficit in previous years into a surplus that stood at AED 39.4 billion in 2005 and climbed to a record AED 72.4 billion in 2006. Although no official figures have been released for 2007, bankers expect the surplus to have remained high after oil prices jumped to USD 140. Central Bank estimates showed the increase in oil prices boosted the country's crude export earnings to a record AED 261 billion last year from around AED 213 billion in 2006 and AED 159 billion in 2005. The income stood at only AED 79 billion in 2000 and less than AED 40 billion in 1999 and 1998. The import duties are very low with no direct taxes on corporate profits or personal income. Other attractive features of Dubai's economy include custom duty as low as 4% with many exemptions, 100% repatriation of capital & profits and no foreign exchange controls, trade quotas or barriers. In addition, there is minimal financial risk involved with a credit rating ‘Aa3' by Moody's. |
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