According to a recent analysis of the largest international real estate markets (approx. by city), Dubai ranked 14th in the top of the highest cost of renting premium /elite office space. The leaders were London, Hong Kong and Tokyo.
At the moment, the cost of renting a premium class office in Dubai will cost a little more than $1,010 per square meter. For comparison, London, which took the first place, offers offices at a price of $2,883 per square meter of space.
At the same time, the emirate shows the highest rates of office space occupancy among all the key markets of the EMEA region (approx. Europe, Middle East and Africa).
However, there are several factors that give sufficient confidence to say that within the next couple of quarters of this year, the rental rate for offices will increase significantly.
In particular, we are talking about an increase in the cost of finishing the offices themselves and an increase in the cost of maintenance services. Last but not least, such growth will be affected by the shortage of building materials and rapidly growing demand.
The shortage of materials will affect not only the construction of new real estate in the emirate, but also the repair and renovation of existing, finishing works and other activities related to the «life support» of properties.
On the other hand, demand will continue to grow in any case. In Dubai, about 70% of the workforce has already returned to work in offices in one way or another. Since the beginning of 2022, business activity indices have been actively growing in the city, old international business is returning, new ones are opening, both local and foreign.
Premium office spaces are always in great demand, as they are a key factor in attracting people to work in offices. This is especially important due to the fact that over the past two pandemic years, a huge number of people have switched to remote employment and they really liked this form of work. Not many people would be happy to return to work in offices.
In general, the current indicators for the Dubai commercial real estate sector illustrate that the market has entered an active recovery phase, the leaders of which will be the growing premium and Class A office buildings.