Owing to its handling of the pandemic, its aggressive vaccination drive and buoyant economy during challenges, Dubai has emerged as the location of choice for many European tech companies looking to expand.
This according to Market in Minutes research by real estate consultants Savills.
EMPLOYEE WELLBEING AND SUSTAINABILITY
The real estate consultant has revealed that the global office sector is changing post-COVID and corporate occupiers are taking a longer-term view on their real estate requirements, with employee wellbeing becoming a priority for companies.
For Savills, while demand for Grade A space has remained as the preferred option, occupiers are now evaluating the ESG (Environmental, Social and Corporate Governance) compliance of the space they occupy and are demanding more sustainable, efficient, and healthy environments.
RISE IN DEMAND FOR HYBRID WORKING MODELS
In addition, the growth in the number of hybrid working models and start-ups is now acting as a catalyst for the sector going forward.
Paul Walshe, Director of International Corporate Services at Savills Middle East said: “After a year of remote and hybrid working, most corporate occupiers are taking a longer-term view on their real estate requirements. Occupiers are more proactive and now initiate discussions with landlords on lease renewals/restructuring – in most cases well in advance of their lease expiry, based on their future real estate strategy.”
“This has increased the demand for co-working and serviced office space. The sector is poised for growth as it expands in the region benefitting from companies limiting their spend on capital expense (CAPEX),” he said.
COMPANIES REDUCING OFFICE SPACE
For Swapnil Pillai, Associate Director Research at Savills Middle East, there has been an increase in the number of companies that have reduced their office space post-COVID and are now adapting to a hybrid working model.
New office spaces are now 30 -40% smaller than previously and are now helping to balance a reduction in size against the higher rental levels.
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