Dubai, Apr 26 (UNI) Business in Dubai has been hit by skyrocketing office and commercial rents which have gone up to 54 per cent, forcing many to move out of the country.
As Dubai's attraction among foreign businesses increases, office rents have soared in the last year, raising the question whether existing and new companies will be able to absorb their rising bills.
A foreign-owned company based in one of the free zones in Dubai said its soaring rents were hurting the business and making it consider moving outside the country.
The rent went up from 90,000 dhiram last year to about 1,50,000 dhiram (One Dh= Rs 10 approximately) this year.
''That's way above the rent cap. What's worse was we got the notice two weeks before the expiry of our lease. That left us with no time to look for a cheaper location. We're being squeezed. The only reason we set up an office here is because the rent was cheap, but now that it's expensive, we're planning to move to Bahrain,'' a company official was quoted by the Gulf News, as saying.
A survey by Dubai Chamber of Commerce and Industry showed that property rents continued to top the list of concerns among businessmen for 2008.
However, not too many offices are shifting out of Dubai, while demand for space is 'becoming stronger'.
Chamber also foresees a lot of pent-up demand from 2008 continuing into 2009, while no major drop-off in the rental rates is seen next year.
According to a report by Real Esate company Asteco, in addition to high demand, the main drivers behind sales price increases for commercial space in Dubai include limited supply and delays in construction.
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