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The rise of the digital economy is changing the property mix in the office segment, according to the H2 2015 12 Cities Report: Occupying and Investing in World City Real Estate by Savills World Research. The report states that finance companies remain the top spender in office rent, but digital and creative companies are catching up fast.
In some locations the digital industry has already overtaken finance as the top office occupants, with creative companies paying more per person in office rents in Sydney compared with finance companies.
Dubai may need to alter its zonal development strategy to attract more global tech occupiers. Typical large, floor-plate corporate premises required by banks may have to give way to smaller, flexible and more dynamic spaces required by creative and digital occupiers.
“There is an emerging trend whereby developers are moving away from megastructures in which cars are essential, to more pedestrianised, urban communities,” says David Godchaux, CEO of Core Savills Dubai.
The report says that while 2012-14 saw a boom in Dubai’s office supply, there was a 14 per cent year-onyear increase in available space in 2014, mainly among out-of-town business zones. Furthermore, space that largely attracted international corporate occupiers has seen rents fall as supply has overtaken demand.
In Dubai’s finance sector, take-up fell by 6.7 per cent during the first half last year and rents by as much as 60 per cent since 2008.
Developers now need to create pedestrian-friendly urban schemes to attract tech occupiers looking for accommodation in a distinctive, creative environments that have fared well in cities such as London and New York.
“This requires a completely different type of development mindset and approach to urban planning, which also needs to overcome the unique challenges posed by Dubai’s climate,” says Yolande Barnes, Director of Savills World Research.
In terms of existing stock, the report indicates Citywalk, a new low-rise mixed-use development arranged around a traditional street layout, is an early successful example of a more tech-friendly development.
Source: Property Weekly