(MENAFN- Khaleej Times)
Dubai plans to expand the Real estate rental index to include commercial properties, a senior official said. Majid Al Marri, CEO of the Real Estate Registration Sector at Dubai Land Department, said that the index will likely be rolled out in the first quarter of 2025.
Al Marri was speaking after the launch of the 'smart rental index,' which covers a residential segment of the local market. This new index is based on the classification of each building, old and new tenancy contracts in the building, and rentals in the area, among other factors.
Industry executives said that the commercial property rental index will most likely follow similar lines, covering each building and community.
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Similar to residential properties , commercial property owners will also be prompted to upgrade their assets to apply for an increase in rentals. Depending on their age, condition, maintenance, and other factors, properties in Dubai are rated 1 to 5 stars.
Dubai's office market-especially A-grade-is witnessing a shortage of new supply due to a massive increase in business and foreign company inflow into the emirate, pushing rentals and prices higher.
“Dubai sales price growth continued unabated, particularly in the office sector. The office market experienced average quarterly and annual increases of 5 per cent and 21 per cent, respectively. This surge is primarily attributed to strong economic and business conditions, combined with a limited supply, particularly of Grade A and Grade B+ properties,” real estate consultancy and brokerage Asteco said in its latest quarterly report.
Dubai saw 0.37 million sqft of office supply during the first half and 0.35 million sqft during the third quarter of 2024, it added.
“Whilst new office completions remained limited, there was a notable increase in project launches, including large-scale Grade A developments such as Immersive Tower in DIFC 2.0 (approximately 630,000 sqft of office space). Additionally, Aldar launched its first commercial development in Dubai, a landmark project on Sheikh Zayed Road anticipated to deliver approximately 950,000 sqft of Grade A office space alongside a luxury boutique hotel and branded residences,” added Asteco.
Majid Al Marri said they conduct regular studies of the real estate market .
“Last October, we announced Real Estate Strategy 2033. Based on our regular studies, especially in the rental market, we saw it was time to have something more accurate based on the cases we see in the rental dispute. We wanted to effectively lower the number of rental disputes by having an accurate market index. This was important based on the feedback from the tenants and owners. Owners want to increase, and tenants want to decrease, so we reached a point where we believe that it is best to have an index based on artificial intelligence (AI),” he added.
In August 2024, Abu Dhabi Real Estate Centre (Adrec) launched the first rental index for the capital, covering a residential market segment. It said it would expand the index to include the commercial segment and service charges to enhance the resilience and reliability of Abu Dhabi's real estate market.
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