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
G7 countries to release oil reserves as IEA agrees to largest ever market intervention
- IEA recommends release of 400 million barrels
RIYADH: Germany, Japan and Austria will release part of their oil reserves after the International Energy Agency recommended the release of 400 million barrels of oil from stockpiles, the largest such move in IEA history.
In a statement, IEA Executive Director Fatih Birol said the flow of oil, gas and other commodities through the Strait of Hormuz have all but stopped, leading global energy supply to fall by around 20 percent.
Ahead of the confirmation of the move — a larger intervention than the 182.7 million barrels that were released in 2022 by in response to Russia’s invasion of Ukraine — several countries began setting out plans to bring their reserves into play as countries grapple with soaring crude prices amid the US-Israeli war with Iran.
Birol said: “I can now announce that IEA countries have decided to launch the largest ever release of emergency oil stocks in our agency's history.
“IEA countries will be making 400 million barrels of oil available to the market to offset the supply lost through the effective closure of the strait.
“This is a major action aiming to alleviate the immediate impacts of the disruption in markets.”
Germany’s Economy Minister Katherina Reiche confirmed on Wednesday her government plans to limit petrol price increases at filling stations to once a day and to introduce more stringent antitrust regulation of the sector.
She did not give an exact timing for those measures, but added that the US and Japan would be the largest contributors to the release of the oil reserves.
The US has not confirmed it would do so, but its Interior Secretary Doug Burgum told Fox News on Wednesday that “these are the kinds of moments that these reserves are used for.”
The announcements did not stop oil prices rising, with Brent crude up 3.26 percent to $90.66 a barrel at 4:29 p.m Saudi time, and West Texas Intermediate up 3.12 percent to $86.05. Both were some way below the $119 a barrel seen earlier in the week.
“The situation regarding oil supplies is tense, as the Strait of Hormuz is currently virtually impassable,” Germany’s Reiche said.
“We will comply with this request and contribute our share, because Germany stands behind the IEA’s most important principle: mutual solidarity,” Reiche said about the IEA’s request.
According to a statement by Reiche’s ministry, Germany will contribute 2.64 million tonnes of oil. This corresponds to 19.51 million barrels.
Reiche stressed there was no supply shortage in the country, which has a legally mandated reserve of oil and oil products intended to cover 90 days’ demand.
South Korea will release 22.46 million barrels of oil, which represents 5.6 percent of the total IEA ask, the country's industry ministry said.
“The government will consult with the IEA secretariat on details, such as the timing and amount, from the perspective of national interests in accordance with domestic conditions,” the ministry said in a statement.
The ministry said it would continue to coordinate closely with major countries in responding to high oil prices to minimise any domestic impact.
Austrian Economy Minister Wolfgang Hattmannsdorfer said his country was releasing part of the emergency oil reserve and extending the national strategic gas reserve, adding: “One thing is clear: in a crisis, there must be no crisis winners at the expense of commuters and businesses.”
Acting ahead of the IEA move, G7 member Japan announced plans to release 15 days' worth of private-sector oil reserves and one month's worth of state oil reserves.
“Rather than wait for formal IEA approval of a coordinated international reserve release, Japan will act first to ease global energy market supply and demand, releasing reserves as early as the 16th of this month,” Prime Minister Sanae Takaichi said in a broadcast statement.
Following a meeting with the IEA on Wednesday, G7 energy ministers said: “In principle, we support the implementation of proactive measures to address the situation, including the use of strategic reserves.”
All IEA member countries are required to keep 90 days’ worth of their nation’s oil use in reserve in case of global disruption.
