Dubai office rentals are likely to drop further this year as landlords compete for tenants in the second most expensive market across the Middle East, Africa and Europe, CB Richard Ellis Group Inc. said.

'With a significant portion of supply still to enter the market this year, we are likely to see further rental reductions as landlords compete to secure tenants,' Matthew Green, head of United Arab Emirates research at CB Richard Ellis, wrote in a report today.

The worst financial crisis since the 1930s weakened the U.A.E. property market as banks curtailed mortgage lending and speculators sold assets. Job losses have cut office occupancy rates and property sales and refinancing have stagnated under tighter bank-lending standards.