The United Arab Emirates is emerging as an affordable, attractive option for companies looking for office space. With rents down and stability in the area, it may soon become a major contender in the international corporate marketplace. To learn more about this, read the full article from PropertyWire.
As office rents continue to fall, the United Arab Emirates is once again becoming an affordable and attractive option for companies wishing to service the wider Middle East marketplace, according to a new analysis.
Continued uncertainties elsewhere in the region only serve to further underline the level of stability that has been achieved in the Emirates, which, along with the quality of completed infrastructure, make it a major contender for any international corporate looking to set up headquarter operations in this region, the latest Global Office Market View from consultants CB Richard Ellis suggest.
According to Mat Green, head of research and consultancy UAE for CBRE, for existing Dubai tenant’s the key trends have been towards reducing operational costs, flight to quality and greater lease security.
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‘Elongated terms of between five and 10 years are now becoming more prevalent as both landlords and tenants seek to reduce their risk exposure. With rental rates now becoming so much more attractive we are seeing an increasing number of occupiers looking to relocate back to the CBD, exploiting favourable conditions to secure high quality office accommodation for extended periods at a fraction of rents once demanded,’ he explained.
The publication of the DIFC rent matrix has helped to boost overall interest in the estate with tenants eager to benefit from a newfound level of transparency in the market. ‘That said private developments in the Freezone may suffer somewhat with achievable rents for non-DIFC managed buildings historically lower than their managed counterparts,’ he added.
In Abu Dhabi, the first batch of the long awaited supply of internationally recognizable Grade A office buildings will deliver during the course of 2011. ‘Occupiers have been stalling on decision-making due to uncertainties in the international economy and local business development, as well as a lack of suitable offices to move to. We are already seeing significant interest from occupiers of all sizes seeking to secure some of the new Grade A office buildings available in 2011, such as International Tower, HQ and Al Sowwah Square,’ said Green.
While the main characteristic of the Dubai market has been a continuing decline in rents, but in turn this has triggered more transactions both in the size and number of deals. ‘The publication of a new rent matrix in DIFC can generate savings for occupiers willing to commit to the new DIFC lease form and allows for greater transparency in doing business there. Demand is being led by the financial and professional services sector and continues to focus on single landlord-owned buildings,’ Green added.
This article was republished with permission from PropertyWire.