Demand for shops and office space is increasing more in the UAE than anywhere else in the world, according to chartered surveyors.
A survey by the British-based Royal Institute of Chartered Surveyors said demand for commercial property in the Emirates had risen to its highest level since 2008, ahead of rises in Thailand, Russia and the United States. However, there was still an oversupply in the UAE's commercial property market
The organisation found 48 per cent more of its UAE members reported that companies were looking to lease new shops and offices during the third quarter, compared with those reporting a fall in demand.
The study was based on responses from 942 surveyors around the world who were asked to gauge demand in their own markets, compared with the previous quarter.
Despite the surge in demand in the UAE, surveyors reported more empty offices and shops than there were businesses to fill them. A net 57 per cent more institute members reported an increase in available commercial space during the third quarter, compared with those reporting a fall.
Surveyors said they expected commercial rents would decline in the UAE. However, sentiment is improving, with fewer of those questioned during the third quarter expecting prices to drop.
The number of buyers hoping to invest in property in the UAE also increased during the quarter. According to institute members, demand from investors rose the third fastest in the world during the third quarter, behind Canada and Japan, with a net balance of 43 per cent reporting an increase.
Members were also optimistic about how the market will perform in the last three months of the year. According to the survey, a net balance of 40 per cent of UAE surveyors said demand would increase further, an improvement from 7 per cent the previous quarter.
A net 22 per cent of surveyors in the Emirates also reported that they expected capital values to increase in the coming quarter - the eighth-highest proportion of surveyors anywhere in the world and ranking behind places such as Russia, Brazil and Hong Kong.
"The improving economic picture in the UAE is likely to be lifting confidence in the domestic real estate market … Strong growth of key sectors such as tourism, commerce and retail will impact directly on the commercial sphere," said Simon Rubinsohn, the chief economist at the Royal Institute.
"The results of the survey are reflected by this, with strong gains in both occupier and investment demand. This turnaround is now shifting expectations for rents and capital values, which are no longer projected to fall."