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Business Home > Nation
 
Dubai office space priciest in ME

Issac John (issacjohn@khaleejtimes.com) / 24 June 2013

Ranked 25th globally in realty chart with overall occupancy cost at $92.57 per sqft per year

Dubai’s office space market is the most expensive in the Middle East and is ranked 25th globally in the real estate sector chart as the city remains the destination of choice for global businesses looking to enter the region.

Dubai with its world class infrastructure remained the destination of choice. —AFP

Dubai’s overall occupancy cost is $92.57 per square feet per year making its office market the priciest in the region, CBRE Global Research and Consulting said in its semiannual Prime Office Occupancy Costs survey.

“Despite a high headline vacancy rate, the availability of quality accommodation within prime areas of the city is actually limited, particularly when looking for larger space requirements. The lack of high quality offices in the CBD (Central Business District) area has seen rents start to slowly rise and this trend is expected to continue for the best quality assets as occupancy rate improves” said, Matthew Green, Head of Research at CBRE Middle East. He said Dubai with its the stable political environment and a truly world class infrastructure remained the destination of choice for global businesses looking to enter the region

Last month, CBRE, a leading market analyst, cautioned that residential prices are rising so fast in Dubai that they could harm the emirate’s competitiveness as a global business hub. Hong Kong Central remained the highest priced market with overall occupancy costs of $235.23 per square feet while four other Asian markets populated the top five, according to the CBRE survey. London’s West End followed with total occupancy costs of $222.58. Beijing’s Finance Street, Beijing’s Jianguomen CBD and New Delhi’s Connaught Place CBD rounded out the top five. Other Asia Pacific markets in the top ten include Hong KongWest Kowloon (6th) and Tokyo (Marunouchi/ Otemachi) (8th). New York’s Midtown Manhattan (10th) returned to the top ten markets for the first time since early 2012, joined by Moscow (7th) and London’s City (9th).

AsiaPacific had 21 markets ranked in the top 50 most expensive, including six of the top ten — Hong Kong Central, Beijing’s Finance Street, Beijing’s Jianguomen CBD, New Delhi’s Connaught Place CBD, Hong Kong West Kowloon and Tokyo (Marunouchi/Otemachi).

The most expensive market in the global ranking from the Pacific Region was Sydney ($119.23 per sqft), which came in at 13th.

Globally, occupancy costs rose by a scant 1.4 per cent on a yearoveryear basis as modest growth in the Americas and Asia Pacific was partly offset by a slight decrease in recessionary Europe. Cluttons said in a recent report that some locations in Dubai have seen a rise in rents over the past six months. This has been apparent particularly in areas that suffered most from the property collapse of 2008, including new business districts such as Jumeirah Lakes Towers, Tecom C, Al Barsha and Business Bay, where commercial rents had previously fallen by as much as 50 per cent.

JLT and Business Bay, in particular, have seen a significant improvement in both inquiry levels, takeup of space and rising rental levels. In these locations, Cluttons has seen rents increase by 1015 per cent in better quality and completed projects.

According to Global’s GCC Real Estate review, Dubai’s office market improved during the quarter with some highquality offices spaces seeing a 10 per cent quartertoquarter rise in rental prices. In the first quarter, while Dubai added 145,000sqm of stock, monthly office rental rates ranged between Dh1,690–Dh2,370 per sqm.

 

 

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