Dubai becomes more affordable
Dubai's total annual cost per employee of living and working accommodation stood at $53,913, a decrease of seven per cent since December
Dubai ranks eighth in a list of the world's most expensive cities for companies to accommodate staff, according to the Savills Live-Work Index.
The list, which compares total housing and office rent costs on a per capita basis around the world, showed that costs in Dubai were less than half that in New York which was judged the most expensive.
Yolande Barnes, director, Savills world research, said: "Office-based businesses operating in major world cities will spend around one-third of their total operating costs on accommodation through a combination of commercial rents, paid directly to landlords, and demands on salaries created by the cost of employees' living accommodation. Fluctuations in these costs will, therefore, have a significant bearing on how competitive a city is to employers."
The study found that Dubai's total annual cost per employee of living and working accommodation stood at $53,913, a decrease of seven per cent since December.
This is less than half the amount of New York at $114,009. Hong Kong is just ahead of London's $100,141 at $100,984.
It is interesting to see that Dubai remains one of the top 10 most expensive cities to live and work in despite the fall in oil prices.
David Godchaux, CEO of Core, the UAE associate of Savills, said: "We attribute this to the perception by corporate occupiers and employees alike that the market has matured and is more resilient to external macro-economic shocks than in the past. This has resulted in a relatively steady level of demand for both office space and residential units.
"One may have expected that Dubai would have become less expensive in comparison to other cities, but even with this decrease of seven per cent over the past 12 months, it is still able to maintain its position in the top 10, showing the confidence of corporate occupiers and employees in the long-term for this market."
Dubai, Lagos and Moscow have all seen rents fall in both office and residential accommodation owing to falling occupier demand in economies closely affected by oil price. Real estate markets in Dubai and Moscow are denominated in US dollars or related currencies, so have not been affected by currency movements against the dollar. By contrast, Lagos now looks 27 per cent more affordable for international occupiers.
New York continue to be the world's most expensive city in which to accommodate staff. This is despite signs of slowing office rents and elevated use of incentives and concessions to both office and residential tenants in New York.
For the last 30 months, London has held top spot, reflecting the high demand for space from a variety of occupiers. However, the impact of currency fluctuations after Brexit has made London more competitive, reducing occupation costs in dollar terms by 11 per cent since the beginning of 2016.
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