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In a recent turn of events, many developers are considering reinventing some office tower buildings into projects for the hospitality industry which is experiencing a lot of demands currently. After the property crash of 2008, residential and hospitality rentals have significantly picked up, but office space rentals never quite recovered. In Dubai, there are plenty of office blocks ready around the Business Bay, Dubai Investments Park and Dubai Silicon Oasis areas but demand is very low at the moment.
Currently, developers are finding ways to make the most out of their properties. It’s not so difficult for businesses to find a space they like on certain locations as there is currently an oversupply of office spaces and occupancy levels in some office blocks are less than 50 per cent. As such, Dubai Holding launched an initiative encouraging investors to enter the hospitality industry. The government has even announced financial incentive packages to companies who will enter the three and four-star hotel segment.
The good news is, Dubai is hosting Expo 2020, and there is a need for more hotel rooms to cater to the anticipated surge in demand. There’s a projected 20 million tourists swarming in by 2020. This means all the hospitality projects being planned are slated to be aligned to this goal.
That is exactly why developers are converting existing commercial towers into hotels. Big names in the industry such as Deyaar and Omniyat have launched several hotel and service apartments in the Business Bay area to name a few. More are being planned around the Dubai World Central area and also in and around Jebel Ali as these locations are closest to the Expo 2020 venue.
Alongside hotels, many developers are also considering the option of converting their projects into high-end serviced apartments. They are seeking options and even though it may cost more to reinvent the towers in their new avatar, the expected surge in tourism revenues is worth every penny of refurbishment.
• Some premium office towers in Dubai to be converted into hotels
• Enlisting developers are given commercial incentive packages
• Aside from hotels, high-end serviced apartments are also planned
Source: Urmila Santosh, Special to Properties
The writer is a freelancer