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Dubai sees rapid surge in supply of flexible office space

Issac John /Dubai Filed on August 31, 2020


Most companies see flex space as part of their overall portfolio mix going forward

With the demand for flexible space gaining momentum globally as corporates adopt a hybrid working model, Dubai has been seeing a rapid increase in the total supply of adaptable office space, according to global property consultant JLL.

"On a regional scale, extensive strides have been taken by Dubai to ensure flexible workspace frameworks are fixed and maintained inline with intensified measures aimed at combating Covid-19," said Toby Toby Hall, director and head of Office and Business Space Leasing for JLL Mena.

To meet the growing demand, there has been a rapid increase in the total supply of flexible office space in Dubai. Although the effort is gaining momentum, the level of flex space in Dubai remains below the EMEA average of 2.3 per cent, suggesting there is room for further growth, said Hall.

JLL, in its latest report, said that the two interrelated trends have combined to shape and define the demand for office space at the global and regional level in recent years - the increased demand for flexible offices, and the growth in remote working and working from home (WFH). "While both of these trends predate Covid-19, the global pandemic has exacerbated their influence and their impact on how office spaces are reimagined for many years to come," said the report.

"While we believe there is some short-term pain as demand for flexible office space contracts, it seems certain to grow in the mid-to-long term as businesses adjust and adopt solutions that increase their agility and reduce their response times. The impact is also expected to translate onto the business models of flexible office operators, resulting in a shift away from common facilities, shared services, and hot desks, to a corresponding growth in the proportion of private space, which ensures corporate privacy and data security," said Dana Salbak, head of Research for JLL Mena.

"In reality, in-office work and remote work are complementary, and neither can completely replace the other. The post-pandemic workplace will involve a combination of three distinct office environments: the corporate office, flexible co-working facilities and remote working. The challenge for occupiers will be to establish the right mix and balance between the different settings and working patterns," said Salbak.

A recent report by Savills noted that flexible offices would continue to grow as 'space-as-a-service' becomes more mainstream across markets. Those cities with higher tech occupier bases should see the strongest increases in flex space demand as startups seeks space on a per-desk basis."

The co-working and flexible work space trend, essentially a post-Great Recession phenomenon, continues to bloom and grow. According to Colliers International, co-working is one of the few expanding office demand sources. And there's plenty of room for it to run. Even with all its growth over the past decade, flexible office space still comprises just a fraction-less than two per cent - of all office space in primary office markets, Colliers reports

The JLL report highlights that most companies see flex space as part of their overall portfolio mix going forward.

"Driven by the shift in the global flex market away from SME's to larger corporates, the Dubai market is expected to experience more concentration in the hands of fewer but larger operators. This will inevitably involve a setback to some independent operators and is likely to be exacerbated by short-time financial pressures resulting from Covid 19," said the JLL report.

The pandemic is resulting in a global shift away from shared co-working facilities to more private and enclosed spaces. "This trend is also apparent with the majority of centres offering only enclosed offices or a hybrid mix of enclosed offices and co-working space. Centres that were originally targeting the co-working sector are now seeking to remodel their space to offer more enclosed offices," it said.


Issac John

Editorial Director of Khaleej Times, is a well-connected Indian journalist and an economic and financial commentator. He has been in the UAE's mainstream journalism for 35 years, including 23 years with Khaleej Times. A post-graduate in English and graduate in economics, he has won over two dozen awards. Acclaimed for his authentic and insightful analysis of global and regional businesses and economic trends, he is respected for his astute understanding of the local business scene.

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