Office spaces demand in Dubai, United Arab Emirates (UAE), has surged over the past five years amid influx of foreign businesses looking to relocate or expand in the Middle East nation.
CORE, a commercial real estate services firm said in its new report that city wide office occupancy levels stood at 81 percent during the first quarter of 2022, the highest in the last five years, while rents in popular districts jumped by as much as 35 percent.
According to the report, a of the demand has come from businesses operating in the services and technology fields, including fin-tech and cryptocurrencies-related entities.
In recent months, Dubai has seen a record number of new business licenses being issued, as well as Ejari registrations.
“A surge in enquiries is coming from EU/UK and other international markets wanting to expand in Dubai due to its favourable and open business environment,” said Robert Thomas, Head of Agency at CORE.
“Dubai is also seeing an influx of many international firms relocating their staff and operations from Russia and Ukraine.”
Besides, while many existing businesses in Dubai have adopted a hybrid work model, most employers are bringing their workers back to the office and retaining existing “spatial footprint”, Thomas noted.
“[And], with progressive cryptocurrency regulations and frameworks in place, Dubai is attracting many cryptocurrencies-related businesses.”
The government has introduced several reforms, including new visas, to attract tourists, global talent and foreign investments. The reforms are “game changing” and are expected to be “an unprecedented catalyst” for Dubai’s real estate market, according to CORE.
With demand for office space rising, rents have also gone up, particularly in popular business districts such as Sheikh Zayed, where leasing rates rose by 35 percent in the first quarter, One Central (29 percent), Business Bay and Jumeirah Lakes Towers (29 percent) and Downtown Dubai (16 percent).
Old Dubai districts of Bur Dubai, Deira and Garhoud, which previously struggled to maintain headline rents, are now seeing double-digit rental increases.
Office units with a combined 480,000 square feet of space were delivered during the first quarter of the year, bringing the city’s office supply to 107 million square feet.