Occupancy levels at the Burj Khalifa have doubled since the third quarter of 2010 on a spike in investor interest, Arabian Business has learned, as the world’s tallest tower marks its first birthday.
High profile events such as the filming of Tom Cruise’s ‘Mission Impossible IV’ movie have spurred new interest in the tower, said Adam Farani, an analyst with Dubai-based real estate agency Better Homes.
“The occupancy in the building has doubled since the third quarter 2010 as tenants are taking advantage of the rental rates on offer,” he said.
December saw the highest number of unit transactions of 2010, he said, without giving details.
In October, an estimated 825 of the tower’s 900 luxury apartments remained unoccupied as landlords slashed rents in a bid to attract tenants.
Today, the annual cost of renting a studio apartment with floor-to-ceiling windows, marble and wooden floors has dropped to AED75,000 ($20,418) for studios, Farani said.
One-bedroom units are on the market from AED110,000 ($29,947), while year-long leases on two-beds cost around AED170,000 ($46,281).
Three-beds apartments will set tenants back AED280,000 ($76,228), Farani said.
The 828-metre tower opened to the public on January 4, 2010 – a year-ago today – with a star-studded launch of 900 apartments, 44 Armani-branded flats and 37 floors of office space.
Its opening, however, coincided with a real estate downturn that saw property prices in Dubai fall some 60 percent from their peak. The emirate went from the world’s best performing property market to its worse, with nearly half of planned real estate projects in the emirate being cancelled.
In October, Catherine Clarke, head of residential valuations at real estate consultancy firm Colliers International, said that sales prices at the tower had dropped by up to 75 percent from their boom era peak.
Apartments commanded around AED2,800 ($762) per sq ft in the third quarter of 2010, down from AED11,000 ($2,995) per sq ft in 2008.
While the tower’s residential sales and leasing side have experienced an upsurge in recent months, the commercial sector has not attracted the same level of interest.
“At present we’ve had very few enquiries for serious and substantial companies,” said Andrew Elliot, senior sales and leasing consultant at Better Commercial, Better Homes’ commercial division.
“We have had a high number of smaller enquiries plus offers… However, they have yet to materialise into more than verbal commitments. To date, we have not transacted any leases or sales in Burj Khalifa since the completion and handover.”
This was echoed by Jesse Downs, director of research and advisory services at Landmark Advisory, who said sales and lease activity in the office sector “remains limited.”
“On the leasing side, there is comparable quality office space available in the area for AED170 to AED250 ($46 to $68) per sq ft,” she said.
“Naturally there would be a premium for office space in the Burj Khalifa, but its yields are minimal, especially considering the high maintenance fees charged to owners.”
To tour a Burj Khalifa luxury apartment, click here
To relive the launch of the Burj Khalifa, click here
Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.