Dubai office rents more affordable

Dubai office rents in high-rise towers are much affordable than its global peers

Dubai office rents are much affordable than its global peers in high-rise towers, according to the latest Skyscraper Index by Knight Frank.
Prime office rents for upper floors in skyscrapers in Dubai are priced at $43.50 per sqft per annum.
The bi-annual report, which examines the rental performance of commercial buildings over 30 storeys, shows that rents in Hong Kong's skyscrapers are the highest in the world by some margin, at $278.50 per sqft.
It is followed by New York, where rents have reached $158 per sqft, Tokyo $149.50 per sqft and London $114 per sqft which retains its place in the top five of the Index. Office rents in top five cities are minimum 165 per cent higher than Dubai office rents and it goes up to 539 per cent higher for Hong Kong vs Dubai.
Among top five cities, Hong Kong and New York witnessed 5.9 per cent and 1.9 per cent growth in office rents respectively during the first six months of 2016. But Dubai office rents for high-rise towers remained unchanged during January to June period of 2016.
Rents in commercial towers in Asia-Pacific are increasing faster than those in Europe and North America, according to the Index.
Skyscrapers in Shanghai recorded the strongest rental growth in the first half of 2016, at 7.6 per cent. Shanghai was followed by Sydney, where rents grew by 6.6 per cent over the period, Hong Kong (5.9%) and Taipei (5.7%).
Toronto, where skyscraper rents have reached $49 per sqft, was the only city outside of the Asia-Pacific region to feature in the top five of the Index by rental growth.
Dana Salbak, Associate Partner, Knight Frank Dubai Research, commented: "Over the first half of the year we have seen skyscrapers in Asia-Pacific outperform their counterparts in Europe and North America.
Salbak added: "Rents in Hong Kong's skyscrapers remain the highest in the world, and with demand likely to outstrip supply for the foreseeable future we expect the city to retain its top position in the Index. Furthermore, the supply-demand dynamics in Hong Kong will continue to support rental growth in Shanghai's skyscrapers, as many companies opt to relocate there."
Knight Frank's analysis shows that rents in skyscrapers in European cities were stable over the first half of the year. Singapore is the only global city where skyscraper rents significantly decreased for the period, with the seven per cent drop attributed to over-supply and diminishing occupier confidence as a result of the slowdown in the Chinese economy.
"Shifts in the occupational markets in Sydney and Taipei have intensified demand for space in skyscrapers, and we expect both cities to perform strongly over the second half of the year," Salbak said.
-abdulbasit@khaleejtimes.com