Office space in Dubai 10th most expensive worldwide
DUBAI — Dubai is now the 10th most expensive city in the world for office space, according to a report by Cushman & Wakefield, the world's largest privately held real estate firm. The annual occupancy cost per square foot of office space in Dubai's central district is $79.93, just behind the occupancy cost of office space in New York's mid-town district at $81.93.
Occupancy cost comprises rents as well as additional expenses, such as the cost of utilities. London's West End is the world's most expensive place for office space, with annual rent of $246.17 per square foot, according to the latest edition of "Office Space around the World."
In terms of rental increases last year, the major component of office occupancy costs, the biggest rise in local currency terms was in Abu Dhabi, with rents going up 200 per cent. Elaine Rossall, the report's author and head of business space research and consultancy for EMEA said: "Almost no space is currently available in the city as companies expand on the back of the current economic boom in the region."
She also said that the driving force in most markets for the increase in office rents has been the financial services sector, "which is in a buoyant mood given stock-market recovery, record levels of mergers and acquisitions and more sophisticated global financial markets."
India's business capital, Mumbai, is the joint biggest riser in the ranking, together with Dublin. Mumbai goes up six places, from 11th to fifth place, with annual occupancy costs of $120.15. India accounts for eight of the top 10 locations in terms of rental growth. Fastest growth is seen in Mumbai's central district of Worli (which also has the highest occupancy rates in Mumbai) and Bandra Kurla Complex, in Mumbai's suburbs.
These two locations have seen rents increase 107 per cent and 93 per cent respectively, said Sanjay Verma, Cushman and Wakefield's executive managing director, South Asia. He also puts the rental rise down to a very active financial services sector, with the entry and expansion of several major investment banks, including Goldman Sachs, and UBS."This strong demand, along with the lack of new development and low vacancy rates, has resulted in the significant escalation of rents."
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