Recently a huge growth in demand for office spaces has been witnessed in Dubai intensifying at the highest rate in the last five years, the latest Real Estate Property Data revealed. Such an impressive hike in demand hasn’t been seen in years and this has happened at a time when a large number of foreign businesses are exploring office options for either relocating part of their business operations or expanding their businesses further in the UAE market.
Warehouse, retail and office spaces have been seen in high demand and the office space occupancy level touched 81% in the city, the highest since 2016. Rental prices soared significantly and went up by as much as 35% in all popular districts. CORE, the commercial real estate services firm reported.
A study conducted by Savills, one of the leading property agents in the world also recently reported that Dubai is, at present, the only city within the Europe, Middle East and Africa territory to record the highest office occupancy levels.
The office space demand boost has mainly been generated by businesses engaged in technology and services sectors including companies in the digital currency and Fintech fields. Dubai, in the last few months also issued a record number of new business licenses and Ejari, the mandatory registration of tenancy contracts by Rera.
Robert Thomas, Head of Real Estate Research and Advisory at CORE, noted, “A surge in enquiries is coming from EU/UK and other international markets wanting to expand in Dubai due to its favourable and open business environment.”
“Dubai is also seeing an influx of many international firms relocating their staff and operations from Russia and Ukraine,” he informed.
As per Robert Thomas, even though many existing businesses have adopted a hybrid working model in Dubai, the majority of employers are now getting their workers back to their offices and retaining existing office spaces.
As Dubai has put in place, progressive cryptocurrency regulations and frameworks, the city is also attracting many cryptocurrencies-related businesses, Thomas highlighted.
The UAE has recently announced several reforms including new visa rules for attracting tourists, global talents and foreign investments. As per CORE, these reforms can be “game-changing” and “an unprecedented catalyst” for the real estate market growth in Dubai.
Rental Prices
Dubai rental prices have been on the lower side from a global perspective however started marching northwards at the start of 2022. Rental prices for offices have begun to witness huge spikes at prime office locations as demand has grown significantly among tenants looking for larger floor spaces.
The rental prices are mainly soaring in those business districts which are popular with foreign businesses including Sheikh Zayed with leasing rates soaring by 35% during the first quarter of 2022 followed by One Central with a 29% jump, Business Bay and Jumeirah Lakes Towers with 29% hike and Downtown Dubai with16% increase.
Bur Dubai, Deira and Garhoud, the old Districts in Dubai which struggled earlier to maintain higher rental prices are also seeing price increases exceeding 10%.
In the first quarter of 2022, a total office space of 480,000 square feet was delivered in Dubai clocking a new high and bringing the office supply to 107 million square feet in the city.
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IMC Group