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Office space in Dubai International Financial Centre (DIFC) and the Downtown area continue to command the highest rental and sales prices.
According to Asteco’s report on Dubai’s office market during the second quarter of 2015, DIFC witnessed 11 per cent growth in rentals. Most of the buildings in the free zone are fully occupied. Leasing rates of shell and core office space in recently completed buildings like the Central Park Towers are estimated to be around Dh180 per square foot, while fitted office space command annual rates of Dh250 per square foot. The annual rent at Index Towers is around Dh350 per square foot.
Downtown Dubai has emerged as a sought-after destination for office space because of its high-quality office buildings, world-class infrastructure and proximity to DIFC. The office rent in this location is around Dh175 per square foot. Sales prices range between Dh2,400 and Dh3,500 per square foot, while businesses have to shell out around Dh5,000 per square foot for an office space at Burj Khalifa.
Business Bay has been seeing a steady jump in the rentals of office space in the last few years, moving up from Dh70 per square foot in 2012 to Dh110 in 2015. This was mainly due to its strategic location – proximity to the central business district, good road network and connectivity to the Dubai Metro. But the area is unlikely to sustain the same growth because of the sudden spurt in new stock entering the market.
Core Savills’ market review of the first half of 2015 suggests the rents in business areas are not that competitive anymore and many companies are looking to move to free zone areas like Jumeirah Lakes Towers (JLT). In JLT, Almas Tower is the most expensive office location, with rents ranging between Dh160 and Dh250 per square foot.
* DIFC and Downtown are the most sought-after office locations
* There is a spurt in demand for offices in free zones such as JLT
* With new stock, Business Bay rents are expected to come down
Source: S. Dhar, Special to Properties
The writer is a freelancer