JLL says Dubai International Financial Centre costs stable at $94 per sq ft per year
Occupancy costs for premium office space in Dubai International Financial Centre (DIFC) remained largely unchanged over the past year at $94 per square foot per year, according to real estate consultancy JLL.
The cost, which includes additional fees and service charges, places Dubai behind London (West End: $193; City: $108) and at a similar level to other second tier cities within Europe such as Stockholm ($94) and Moscow ($89), but ahead of other leading cities such as Frankfurt ($73) and Paris ($52).
JLL said on average occupancy costs for premium space across Europe have increased by an average of 4 percent in 2017, but this is not the case in Dubai, where no increase was recorded.
Toby Hall, head of Office and Business Space Leasing, UAE, JLL said: “Corporates are becoming increasingly aware of how their real estate can be a powerful tool in the war for talent and in increasing employee productivity, and this is impacting decisions on location and office types.
“The DIFC in Dubai is a great example of a market which offers premium office space in a competitive city which attracts global talent and innovation. The demand to have more premium office space has significantly increased and we will be observing an upsurge in supply of improved quality space across Dubai over the coming few years,” he added.
As with other global markets, the level of vacant space within premium buildings in Dubai remains below that in the general market, illustrating the demand among tenants for space in the best quality buildings, he said.
JLL noted that while there is greater occupier choice in the overall market, space in premium buildings remains limited, with vacancies in premium buildings remaining below 5 percent in Tokyo CBD, Hong Kong and London.
The same trend is apparent in Dubai, with vacancies in the premium space in the DIFC and the CBD far below that of peripheral office sub-markets with inferior quality space.
The shortage of premium space in the DIFC has encouraged developers to commence or complete a number of new projects in this location in recent years.
Globally, the most expensive premium office rents globally are found in Central Hong Kong ($323), New York’s Midtown ($194) and Beijing, Finance St ($190).