Dubai’s supply of office space is predicted to grow by 7 per cent, according to a new real estate research report.

According to the Dubai Office Market Q1 2016 report compiled by Core, the UAE subsidiary of global real estate consultancy firm Savills, the city’s office market supply reached 8.4 million square metres in 2015.

The areas that met with the most growth last year include Business Bay, Deira, Bur Dubai, Dubai Healthcare City, Tecom C and Jumeirah Lakes Towers, though Business Bay is expected to be the focus for more commercial space this year, according to the report.

Growth in supply was 7 per cent, 3 per cent and 5 per cent in 2012, 2013 and 2014, respectively. Prime areas last year grew by 5 per cent, with the bulk of new units handed over in Business Bay.

"The growth in supply is likely to be most significant in Business Bay over the next few years as the area seeks to establish itself as one of Dubai's premier business districts,” the report said. “Given the rapid growth in supply, office sector sales prices in this area remain under slight downward pressure, at least for the moment.”

"The UAE dirham's peg against a strengthening US dollar is also providing an increasingly challenging environment for developers as Dubai real estate becomes increasingly expensive for international buyers," it added.

In terms of rental levels, increased supply along Sheikh Zayed Road saw a drop in rates last year, while in the popular Downtown Dubai area rents remained stable, according to Zawya.

Sale prices were also down last year, with Business Bay, Tecom C and Jumeirah Lakes Towers, declining year-on-year by 9 per cent, 13 per cent and 17 per cent, respectively. Downtown Dubai and DIFC sale prices were more resilient, dropping 4 per cent and 3 per cent year-on-year, respectively.