Islamabad, Jan 6: Dubai plans to expand its smart rental index to include commercial properties in the first quarter of 2025. This move, announced by Majid Al Marri, CEO of the Real Estate Registration Sector at Dubai Land Department, builds on the success of the residential rental index, which factors in building classifications, tenancy contracts, and rental trends.
Key Features of the Commercial Rental Index
- Evaluation Criteria: Properties will be rated from 1 to 5 stars based on age, condition, and maintenance. Landlords will be encouraged to enhance property quality for rental increases.
- Market Dynamics: The Grade A office space market faces a supply shortage, driven by an influx of businesses, raising rental prices and boosting sales.
Market Trends in Dubai’s Office Sector
- A 21% annual increase in office rental prices in 2024, as reported by Asteco.
- New Developments: Projects like Immersive Tower in DIFC 2.0 and Aldar’s Sheikh Zayed Road project add significant Grade A office space to the market.
- Limited Supply: Despite adding over 0.7 million square feet in 2024, demand continues to outstrip supply.
AI-Powered Solutions for Market Stability
Dubai’s Real Estate Strategy 2033 emphasizes AI-powered rental indices to reduce disputes between tenants and landlords. By balancing tenant demands for lower rents and landlords’ expectations for higher returns, the new index aims to enhance market transparency and efficiency.
Abu Dhabi’s Parallel Efforts
Abu Dhabi introduced its first rental index for residential properties in August 2024, with plans to extend it to commercial properties and service charges, aligning with Dubai’s vision for real estate sector reliability.
Dubai’s initiative reflects a forward-thinking approach to real estate management, ensuring sustainability and market growth.
