As international banks and companies grow into the financial hub famed for its love of glamorous buildings, office rents in Dubai are increasing for the first time in six years, rising faster than in New York or London. This is according to CBRE’s ‘Dubai Residential Market Snapshot August 2022’.
Skyscrapers like ICD Brookfield Place, which soars 928.5 feet (283 meters) above the financial sector, are evidence of the emirate's scramble for office space. Nearly 90% of the 1.1 million square feet of office and retail space in the skyscraper, which opened as the epidemic swept throughout the globe, is already occupied or under contract, and there is a lengthy waiting list for the remaining space.
Due to Dubai's quick reaction to the pandemic and relatively simple access to visas, the emirate is attracting more money and workers from abroad. This is increasing demand for office space in buildings throughout the city. The pace at which employees are going back to their workplaces is exceptionally high. As they relocate their headquarters from countries like Hong Kong and Russia, an increasing number of businesses are also developing in the sunny commercial center.
DUBAI’S STAND-OUT REAL ESTATE MARKET
The market is improving with a considerably strong return to the office in Dubai than in not only other emirate jurisdictions but also other financial hubs throughout the world. According to real estate firm Savills Plc, more than 80% of employees in the emirate are back at work in the office as opposed to fewer than 40% in the London City’s market. At the end of June, the average office occupancy rate in the US reached its highest level since the pandemic started, hovering at about 43%.
The price of office rent in Dubai increased during the second quarter of this year for the first time since the beginning of 2016. Up until June this year, grade A office space saw a rise of 7.2% while prime office rentals jumped by 7%. On the other hand, lesser quality workplaces saw an increase of 3%, according to real estate consultant CBRE Group.
In contrast, as per CBRE, prime rents increased 3% or less in various parts of New York while they increased 1.4% in the City of London during the second quarter.
Even while other financial centers like New York and London fight to get workers back to their desks, Dubai stands out in a time when a strong discussion about the future need for office space has erupted globally.
