Dubai office market most expensive in the Middle East

Dubai office market most expensive in the Middle EastImage Credit: Supplied

Dubai leads the office space market in the Middle East and is ranked 23rd globally, according to CBRE Global Research and Consulting's semi-annual Global Prime Office Occupancy Costs survey. The prime office occupational cost in Dubai is $92.56 (Dh340) per sq ft per year as of the first quarter.

''Dubai continues to be the destination of choice for global investors looking to enter the region,'' said Nick Maclean, Managing Director of CBRE Middle East. ''Overall market fundamentals are arguably stronger now than during 2008, with solid occupier demand, a smaller development pipeline, improved regulations and a healthier global economy. Over the next 12 months, demand for prime office space will continue to increase as companies upgrade their existing set-up or expand their offerings in light of the recent positive activity.

''The lack of high-quality offices in the commercial business district and the in creased demand from corporates has resulted in rentals slowly rising in prime locations. The rentals are likely to increase further as landlords seek to achieve premiums on remaining space as occupancy levels near capacity. CBRE expects demand to remain high throughout the year in key locations such as Downtown Dubai, Dubai International Financial Centre and Tecom.''

London's West End remained the world's highest priced office market with overall occupancy costs of $277 per sq ft per year, but Asia continued to dominate the world's most expensive office locations, accounting for three of the top five markets - Hong Kong Central at $242 per sq ft, Beijing Finance Street at $194 per sq ft and Beijing Central Business District at $187 per sq ft. Moscow ($165 per sq ft) rounded out the top five.

Global prime office occupancy costs rose 2.3 per cent year-on-year, led by the Americas (3.3 per cent) and Asia Pacific (2.9 per cent). Europe, Middle East and Africa (EMEA) was essentially flat, edging down 0.1 per cent year-on-year.

The regional results are consistent with recent economic trends, in that the American economy has been stronger than EMEK's over the past year. While Asia Pacific exhibited the highest economic growth of the three regions, it also has a large pipeline of office projects, which is beginning to put downward pressure on costs in key markets.

CBRE tracks occupancy costs for prime office space in 126 markets around the globe. Of the top 50 most expensive markets, 21 were in EMEA, 20 were in Asia Pacific and nine were in the Americas.

Source: Property Weekly


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