According to a new report by international real estate consultancy Cluttons, while Sharjah’s office rental market saw no growth during the July, August, September period, rents are expected to rise during the last quarter of the year due to growing demand for A grade office space. Some prime commercial locations saw a lowering of rental costs during the third quarter. However, demand for Sharjah’s industrial space has remained strong throughout the year.
Cluttons cited Sharjah’s growing economy and population as the biggest drivers of property demand. Ratings agency Standard and Poors recently stated that it expected the emirate’s economic growth to continue at an average of 8 percent GDP growth until at least 2017. Sharjah is the only economy in the Middle East region with no single sector contributing to more than 20% of its GDP and the property market has seen demand across all types of property as the emirate grows to accommodate a wide variety of commercial interests.
According to Cluttons, although dropping 12 percent compared with the same period last year, Sharjah’s prime commercial area Al Majaz retained its position as the city’s most expensive location for office space in Q3 2014, with rents remaining stable at AED 75 per square foot. Notwithstanding any increase during the last quarter of the year, Sharjah office rental costs are expected to remain highly competitive. In comparison, office rents in prime areas of neighbouring Dubai can reach AED 220-270 per square foot.
Demand for Sharjah’s industrial space and warehousing has continued to grow, in line with the growth of the economy and Sharjah’s position as the UAE’s industrial powerhouse. The emirate has seen an upturn in warehouse requirements due to both expanding industrial concerns and new companies moving to Sharjah. The majority of demand has been for 2,000-3,000 square foot warehouse spaces driven by trading, distribution and retail companies.
The report also saw increasing demand for space in Sharjah’s industrial zones located near to Sharjah International Airport due to availability of affordable space and better access to local and international markets. Sharjah Airport International Freezone (SAIF Zone) registered 800 new companies during the first six months of 2014.