The report, from commercial real estate outfit Cluttons, says that the office space market in Dubai has seen a ‘healthy increase’ of late.
A fall in office rents is partly to blame for the rise in demand according to the report, with some districts of the city seeing rents falling from seven to 30 percent.
The report stated: “Dubai is still viewed as an important and strategic location for businesses to have a presence. With the city becoming affordable, this is a good time for foreign companies to establish themselves within Dubai.”
However, the report did add that while some districts have seen a drop in rents, others such as DIFC, Sheikh Zayed Road, Tecom and Emaar Square have rents from AED 100 to AED 250 per square foot.
The report added: “Prices have held steady in more prestigious office locations…This is an encouraging sign that the market is in recovery mode.
“However, overall, the market still shows a trend of downward pressure on rents that was seen throughout 2010, caused by the oversupply of new office stock.”
Overall vacancy levels in Dubai stand at approximately 40 per cent.
The Dubai market will be ‘driven to a higher level of maturity’ in the future by landlords offering longer leases and large rent-free periods according to Cluttons.
Meanwhile, it has been announced that Dubai intends to reduce its energy consumption by 30 per cent over the next two years. The city is aiming to become the lowest carbon economy in the region, a state official said recently.
The comments came at the recently concluded Dubai Global Energy Forum.
Editor’s notes: In Q1 2023, rental levels had increased year-on-year in the majority of districts. Most notably in One Central, Business Bay, JLT, Deira, DIFC, Dubai Investment Park, Dubai Production City, Dubai South and Al Barsha Heights. In fact, the only location that hadn’t shown an increase was Dubai Design District which remained stable.
In 2022, the Dubai International Financial Centre (DIFC) became the 16th most expensive location in the world in which to rent office space at the equivalent of USD 103 per square foot per year gross (net effective rent plus additional occupancy costs).