Dubai is a global hub of business and trade. Owing to its numerous attractive entrepreneurship options and residence visa relevancy, the emirate has increasingly become a stronger and more favourable option for entrepreneurs from all over the world. Not just the conducive work environment and supportive legal framework but you can also find an extensive portfolio of offices for rent in Dubai to choose from.
Scope of rental offices in Dubai
From furnished offices in high-rise towers to purpose-built offices in green developments and from stand-alone office units to offices in factories, Dubai offers a huge variety of commercial properties. With the expansive scope of commercial properties, the demand for offices for rent in Dubai has always been higher. On the contrary, the commercial sector was mostly outperformed by the residential sector – due to higher demand and prices.
And seeing the demand, we can easily claim that Dubai property prices will continue rising in 2023 as well.
The rebound of commercial properties in Dubai
After showcasing a nimble response to the COVID-induced global pandemic and easy access to residence visas associated with the investment, Dubai has become the centre of everyone’s attention. The global entrepreneurs have also diverted their attention towards Dubai to establish there a base for their businesses. Resultantly, not just the demand for commercial properties in Dubai but the prices have also increased.
For the first time in six years, office rents are also rebounding in Dubai. “The rents for offices in Dubai are increasing at a record rate – rising faster than in New York or London,” Bloomberg reported. The spike is notable and a result of global banks and businesses looking to the emirate to expand their operations into the emerging global financial hub.
The drive to acquire offices for rent in Dubai in skyscrapers like ICD Brookfield Place – a 928.5 feet high tower located over the financial district. The tower opened during the global pandemic but interestingly, 90 per cent of its 1.1 million square feet of office and retail space has already been acquired or under offer – with a long wait list for the rest.
Note: The tenants of ICD Brookfield include UBS Group AG, Rapyd – an Israeli fintech firm and Pernod Ricard SA, which relocated its staff from Hong Kong.
ICD Brookfield Place already has more than 100 tenants – far more than a similar sized building in the USA, which would just have four or five. Speaking about the amenities, Devereux revealed that it has 46 elevators serving 53 floors and indoor gardens to escape Dubai’s summer heat.
A significant shift in Dubai real estate sector
The significant rise in demand for rental properties in Dubai shows a shift in the emirate’s commercial property sector, which was previously most affected during the property slump in 2014. Now, a large number of entrepreneurs have preferred Dubai over the established markets of Hong Kong and Russia to expand their businesses.
Moreover, the entrepreneurs have also started luring their employees back to offices in Dubai at a higher rate, after the global pandemic. During the second quarter of 2022, the value of office rentals rose significantly for the first time since early 2016.
“Prime office rents rose 7 per cent in the year through June, while grade A space increased 7.2 per cent. At the other end of the spectrum, lower grade workspace rose 3 per cent,” according to American real estate company CBRE. However, when the rents are compared to other markets, we can find that prime rents in London and New York rose 1.4 per cent and 3 per cent or less respectively.
“The whole market is sort of lifting itself up. We have seen the return to the office much stronger than other jurisdictions like the US and the UK,” said Rob Devereux chief executive officer of ICD Brookfield, a joint venture between New York-based Brookfield Asset Management Inc. and the emirate’s sovereign wealth fund, Investment Corporation of Dubai.
Dubai Commercial sector stands out
Currently, the global pandemic has led to a fierce debate about the future demand for commercial properties and office units globally. However, Dubai commercial properties sector is a standout even at this time, when other financial hubs like New York and London find it hard to lure employees back to their desks.
Almost 80 per cent of total workers are back in the offices in Dubai compared to the London City submarket with less than 40 per cent and the USA with nearly 43 per cent of total employees, at the end of June 2022 – the highest level since the pandemic began.
Demand surpassing Supply
When offices in Dubai started becoming very attractive for new and existing entrepreneurs after COVID but there was hardly any new supply in the market. Mostly because, only a few commercial or mixed-use projects were built after the 2014 market slump. Apparently, it may not seem a problem but the demand surpassing the supply can be a serious issue because “the allocation of visas is linked to the quantum of office space occupied, said Taimur Khan, head of research at CBRE.
A spike in demand for rental properties in Dubai
The demand for high-end offices is not just limited to ICD Brookfield Place or the financial district alone but it is equally high away from this place. For instance, Dubai Multi Commodities Center, Uptown Tower boasts over 495,000 sq. ft. of prime office space and it has already been completely leased – far before the skyscraper is completed.
With limited supply and an influx of several new companies exploring the market along with the existing businesses striving to lure workers back into offices with better-than-before office spaces – rental prices are unlikely to show any signs of slowing down. Rental values will increase manifold in the years to come.
According to a rough estimate, almost 1.5 million sq. ft. will be completed this year and around 60,000 sq. ft. will be added in 2023. This all will add to the existing high demand for offices for rent in Dubai, which will increase the rental value of these properties.
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Whether you are new to the Dubai real estate market or an existing entrepreneur planning to find new office units in the emirate, the HFRE sales team is there to help you. All you need is to call us at +971 4876 2473 or write us an email at email@example.com and one of our sales representatives will help you find the most suitable office unit according to your budget and needs.