2023-08-23 22:09:30
The Savills company, which specializes in the field of real estate consulting, revealed that the office market in Dubai witnessed a significant increase in demand for high-quality office space during the second quarter of this year 2023, noting a “remarkable influx of new international companies that established their regional offices in Dubai during the six months.” In the past, this clearly confirms the growing need for office space within the city.
The company stated in its latest report on the office real estate market, entitled “The Office Real Estate Market in Minutes”, in Dubai for the second quarter of 2023, that it was observed that there was a high demand for this category of offices by banks, financial services companies, and the technology, media, and communications sectors.
The report stated that the quarterly increase in rent values in Dubai led to the upgrading of its position, to rank eighth in the global hierarchy of the main, most expensive office real estate markets in the world.
According to the report, the emirate was also able to attract new companies, particularly from the United States and Europe, which indicates an increasing demand for office space. Asian companies, particularly from India and China, are also accepting to establish their headquarters in Dubai.
Boom and expansion
Swapnil Pillay, Associate Director of Research at Savills Middle East, said: “When we compare the performance mechanisms of office real estate in the Middle East, and in Dubai in particular, with the rest of the world, it is clear that the situation is completely different, as Dubai was one of the very few cities in the world. Which resumed business as usual after a relatively short period of closures due to the (Covid-19) pandemic, and since then, the office real estate market in the emirate has continued to thrive and expand.
He added, “There is another feature that distinguishes Dubai when compared to its counterparts from North America and Europe, which is that options for working from home for long periods were not widely prevalent. And companies in the city focused more on hybrid business models once the closure restrictions were lifted.
noticeable flow
For her part, Paula Walsh, Director of Transaction Services at Savills Middle East, said: “There has been a significant influx of new companies establishing their regional offices in Dubai over the past six months, which clearly underscores the growing need for office space within the city.”
She added that «many leading financial services companies, such as (Alliance Bernstein), (Golden Tree Asset Management), (Virtion) from the United States, and (St. James Place) from the United Kingdom opened offices in Dubai during the reporting period. On a similar note, the gradual influx of Asian companies, particularly from India and China, has contributed to this vibrant scene.”
According to Savills, the increase in leasing activity was mainly driven by a wave of demand led by prestigious American and European companies, which led to an increase in the share of office rental transactions to 72% in the second quarter of 2023, compared to 55% recorded in the first quarter of 2023.
leasing activities
Many companies have re-evaluated their ideal spaces, a trend adopted by the emergence of hybrid business models at the start of the year.
Leasing activities were concentrated on all first-class projects within the city, and areas such as the Dubai International Financial Center in particular thrived, due to the issuance of exclusive commercial licenses by the Free Zone Authority. As a result, rising demand has driven up rental values in most markets.
Rental prices within the Dubai International Financial Center witnessed an increase of 15% year-on-year, while One Central, Business Bay and Jumeirah Lakes Towers areas witnessed, on average, higher increases of 27%, approximately 39% and 23%, respectively, compared to In the second quarter of 2022.
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