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Dubai is one of the least expensive places in the world to rent office space in a premium high-rise building, according to the latest data released on Wednesday.
The annual cost of renting a place in a skyscraper at a high-end location in Dubai can cost about $43.50 per square foot, or about $65,250 (Dh239,673) a year.
That’s only about a quarter of the average annual office rent in Hong Kong, the world’s most expensive city to set up an office, and still cheaper than the premium rents in Asian cities like Mumbai, Beijing and Singapore, or in a number of European capitals like Paris, Frankfurt and London.
According to Knight Frank’s latest data, setting up shop inside a commercial tower in Hong Kong can easily set anyone back $263.25 per square foot (sq.ft.) annually or about Dh1.4 million for a 1,500 sq.ft.space.
Premium office rents in Mumbai average around $51.54 per square foot, while those in Beijing and Singapore are estimated to cost approximately $62.75 and $84.75, respectively.
Knight Frank’s Skyscraper Index looks at the rental performance of commercial buildings over 30 stories high across the world and ranks major cities based on the average annual office premium rent as of the second half of 2015.
Dubai appeared at the bottom of the list, ranked 18th out of the 21 cities monitored for the study. After Hong Kong, the most expensive place is Manhattan, New York (2nd), followed by Tokyo (3rd), London (4th) and San Francisco in the top 5.
Office rents in Dubai’s central locations, particularly in the Central Business District and prime areas, have remained stable over the first three months of the year, according to JLL. The consultancy firm said that there is still a strong demand for properties in premium locations. “Hence, we notice a decline in vacancy rates mainly across the DIFC prime buildings,” JLL said in a report.
In terms of rental performance, however, Knight Frank’s study indicated that the London commercial property market is something to reckon with, with lease rates in the British capital rising 9.7 per cent in the second half of 2015. London had earlier topped the table for rental growth in Knight Frank’s previous index.
Office rents in London are rising faster than in any other city in the world. In comparison office rents in Hong Kong only rose 3 per cent over the same period.
“There has been much debate around the future of London’s skyline, but the rental performance of the capital’s skyscrapers points to the fact there is huge demand for space in landmark, tall buildings and we expect the upward pressure on rents to continue,” said Will Beardmore-Gray, head of Knight Frank’s tenant rep and agency business.
Source: Cleofe Maceda, Senior Web Reporter, gulfnews.com