Already overstocked with office space and with vacancy rates running at significantly high levels, Dubai will soon see the opening of 10 new buildings at a site close to its as-yet-unfinished Al Maktoum International Airport.
The office towers form part of the Dubai World Central development that lies on the western edge of the city. Its backers, the Dubai Aviation City Corporation, recently signed up CB Richard Ellis (CBRE) to promote the offices to potential foreign investors as low-cost but high-quality space.
Prices on office space in Dubai have slumped in recent years as demand declined in the wake of the global financial crisis but supply continued to pour onto the market.
The Dubai Aviation City Corporation’s chief operating officer Rashed Buqara’a said: “We are very pleased to announce the appointment of CB Richard Ellis as our global marketing and leasing agent, which we believe will support the ongoing growth of Dubai World Central as a rapidly growing fast-cycle logistics hub.”
Arranged in two clusters, the development comprises a total of 2.3 million square feet of leaseable office space in what is the largest city in the United Arab Emirates.
CBRE’s managing director in the Middle East Nicholas Maclean said: “The Al Maktoum International Airport development by DWC is further enhancing Dubai’s credentials as one of the leading logistics and transportation hubs in the world.”
Dubai’s office space is largely arranged into distinct sector-specific areas, with dozens of businesses from the technology, media, financial and energy industries well-established in sites around the city.
Editor’s notes: Dubai has a growing number of office space districts such as One Central, Business Bay, JLT, Deira, and Dubai International Finance Centre (DIFC), which, as of 2022, was the 16th most expensive location to rent office space in the world and dominated by banks such as Standard Chartered and hedge funds.
Al Maktoum International Airport also known as Dubai World Central was, as of July 2023, expected to be completed in 2023.
The office space offered at DWC is both office space that can be rented on conventional terms as well as flexible office space and workspace solutions from flex space providers Regus.
In the first quarter of 2023, office space leasing activity was dominated by the technology, media and telecom (TMT) and banking, financial services and insurance (BFSI) sectors, both with a high preference for high-quality Grade A stock.
The availability of this type of stock continued to push rental levels higher. Rental values on average increased by 2%
q-o-q across the DIFC, Downtown Dubai and One Central micro markets although they rose by 11% in the DIFC micro market.
On a y-o-y, DIFC and One Central clocked in gains of 18% and 22%, respectively.
Vacancy rates at the end of 2022 stood at less than 15% and with little stock in the development pipeline was expected to decrease in 2023.