LONDON: Commercial property landlords in the UAE have been forced to offer tenants better incentives to stay as occupier demand fell for the seventh consecutive quarter.
The claim, made in the latest quarterly report from the Royal Institution of Chartered Surveyors (RICS), represents the latest dampener on hopes that the market may be about to turn the corner.
Occupier demand fell across office, industrial and retail property as the amount of leasable space continued to rise.
“The excess supply combined with deteriorating demand prompted landlords to increase inducements further during the second quarter,” the report said.
Near-term rent expectations remained downbeat for the ninth consecutive quarter while 12-month rent expectations also edged lower with respondents expecting a fall of more than 2 percent over the coming year.
RICS also said that the trend in foreign enquiries relating to taking commercial property was also in negative territory.
Most respondents to the survey thought the market was in mid-downturn, while 21 percent said it was near the bottom.
According to estimates from property broker JLL, the Dubai office market saw the delivery of about 33,000 square meters of office space in the second quarter of the year.
A further 190,000 square meters is expected to be completed in the second half of 2017.
The broker said that no major office completions took place in Abu Dhabi during the second quarter with the total stock of office space remaining at 3.5 million square meters.
Job losses have hit some corporate occupiers in both UAE cities, as the weak oil price and subdued consumer sentiment hurts demand for commercial space.
The retail sector has also come under pressure because the strong dollar, to which the dirham is pegged, has made purchases expensive for some holidaymakers.
Still, the RICS said that the supply of properties for sale is rising at a slower pace across all sectors and that projections are marginally positive for prime retail assets in the country.
The Investment Sentiment Index moved to a reading of -14 from -35.
That shows that even though overall conditions are deteriorating, the negative trend is diminishing gradually, RICS said.
However prime office locations as Dubai International Financial Center and Dubai Media City remain in high demand with tenants.
Globally, commercial property sentiment remains in positive territory according to the RICS Global Commercial Property Monitor.
Both the headline occupier sentiment and investment indices were positive in 23 of the 32 countries tracked.
UAE commercial landlords offer tenant incentives as demand falls
UAE commercial landlords offer tenant incentives as demand falls
Saudi ports brace for cargo surge as shipping lines reroute
RIYADH: Preliminary estimates suggest that several global shipping lines could reroute part of their operations to Saudi Arabia’s Red Sea ports, potentially adding 250,000 containers and 70,000 vehicles per month, according to Rayan Qutub, head of the Logistics Council at the Jeddah Chamber of Commerce, in an interview with Al-Eqtisadiah.
“Any disruption in the Strait of Hormuz not only affects maritime traffic in the Arabian Gulf but could also reshape global trade routes,” Qutub said, highlighting the strait’s status as one of the world’s most critical maritime chokepoints for energy and goods transport.
With rising regional tensions, international shipping companies are reassessing their routes, adjusting shipping lines, or exploring alternative sea lanes. This signals that the current challenges extend beyond the Arabian Gulf, impacting the global supply chain as a whole.
Limited impact on US, European shipments
The effects of these developments will not be uniform across trade routes. Qutub noted that goods from China and India, which rely heavily on routes through the Arabian Gulf, are most vulnerable to disruption. In contrast, shipments from Europe and the US typically traverse western maritime routes via the Suez Canal and the Red Sea, making them less susceptible to regional disturbances.
Saudi Arabia’s strategic location, he emphasized, strengthens the resilience of regional trade. The Kingdom operates an integrated network of Red Sea ports — including Jeddah, Rabigh, Yanbu, and Neom — that have benefited from substantial infrastructure upgrades and technological enhancements in recent years, boosting their capacity to absorb increased cargo volumes.
Red Sea bookings
Several major carriers, including MSC, CMA CGM, and Maersk, have already opened bookings to Saudi Red Sea ports, signaling a shift in operational focus to these strategically positioned hubs.
However, Qutub warned that rerouted shipments could increase sailing times. Cargo from Asia, which normally takes 30-45 days, might now require longer voyages via the Cape of Good Hope and the Mediterranean, potentially extending transit to 60-75 days in some cases.
These changes are also reflected in rising shipping costs, driven by longer routes, higher fuel consumption, and increased insurance premiums — a typical response when global trade patterns shift due to geopolitical pressures.
Qutub emphasized that Saudi Arabia’s transport and logistics sector is managing these developments through coordinated government oversight. The Ministry of Transport and Logistics, the Logistics National Committee, and the Logistics Partnership Council recently convened to evaluate the impact on trade and supply chains. Regular weekly meetings have been established to monitor developments and implement solutions to safeguard the stability of supplies and continuity of trade.
He noted that the Kingdom’s logistical readiness is the result of long-term strategic investments, encompassing ports, airports, road networks, rail systems, and logistics zones. Today, Saudi logistics integrates maritime, land, rail, and air transport, enabling a resilient response to global disruptions.
Qutub also highlighted the need for the private sector to continuously review logistics and crisis management strategies, develop alternative plans, and manage strategic stockpiles. Such measures are essential to mitigate temporary fluctuations in global trade and ensure smooth supply chain operations.
