Colliers International said that the problem will be made worse by the completion of late running projects.There is concern that the sudden release of large amounts of newly completed office space in 2010, rather than the gradual release of developments over the next two years will flood the market.
This could have a negative effect on the commercial property market. "Delays to completion over the next two years accentuate the risk of a supply glut thereafter," said Colliers International MENA Real Estate Overview Q4 2008. It said that more than 6.3M.m2 of office space was forecast to be available by 2010 but this is now just 4.9M.m2 following delays.
Materials and labour shortages during the first half of the year are reasons behind the delays. "We are currently working on a project which is suffering delays of 100 days," one consultant told NCE. “It is mainly due to problems securing cement deliveries."
The report comes as the region’s major real estate clients are beginning to scale back some of their projects as international investors cut spending and they find it harder to obtain credit.
Consultants said that so far the predictions of an oversupply of office space have not affected their workloads. "When I arrived in Dubai three years ago I thought there was five years left in the market," says Mott MacDonald divisional director (buildings) Steve Rayner.
"And I still say there is five years left." Responding to the high demand from professionals, the Chartered Institute of Building this week announced it will open a series of offices in Gulf states.