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Today it’s quite difficult to find free Grade A office for rent in central Dubai, in areas such as Business Bay, Dubai Marina and Downtown Dubai. This is not surprising given that, with all economic benefits Dubai has to offer to large companies, office rentals here remain one of the lowest globally.
Knight Frank’s research revealed that average office per sq m rentals in central areas of Dubai currently stand at USD 470, which is about six times cheaper than in Hong Kong and three times cheaper than in London, where one square meter of office space can be rented at an average of USD 2850 and USD 1360, respectively. To calculate the average rentals Knight Frank analysts used the Skyscraper Index.
The report analyzed rentals in the world’s commercial buildings having more than 30 floors in height. According to the research, real estate office market in Dubai stays mainly two-tiered, meaning that, on one hand, the demand is growing for high-quality large spaced Grade A offices in central areas, thus keeping their rental stable. On the other hand, offices supply in remote areas and free zones is growing, which, however, does not mean there is no demand for them.
As imexre.com has previously mentioned, Dubai office property stock increased by 137,800 square meters in 2015, while another addition of about 269,000 and 368,000 square meters is scheduled for handover in 2016 and 2017, respectively.
The fastest global increase in office rentals in skyscrapers was recorded in London. During the second half of 2015 office rentals here saw an uptick of an average 9.7%. And the only city in the world, where office rentals got cheaper, is Singapore — because of the Chinese economy stagnation the demand for office rentals is going down here, thus rentals fell by 4.75%.
