By Courtney Trenwith
Emirate’s high office rents have seen it rise two places in a global ranking of the most expensive cities
Dubai’s high office costs have seen it move up a global ranking by two places in three months.
The emirate is now the 23rd most expensive location in the world to rent an office, up from 25th during Q2 2013, according to the Q3 CBRE Global Prime Office Occupancy Costs survey.
Office space in Dubai – an international hub for finance, trade and transport – costs an average $92.56 per square foot per annum, according to the report.
However that is far less than the most expensive location – London (West End), where office space is worth an average $259.36psf per annum.
West End’s office space costs have skyrocketed this year, from $222.58psf per annum in March, to take over Hong Kong Central ($234.30psq per annum in September), due to development restrictions in sought-after areas, as well as increasing demand from financial firms,
CBRE Middle East managing director Nick Maclean said Dubai remained was the destination of choice for global investors entering the region.
“They are primarily driven by the prospects of favourable economic conditions, stable political environment, a truly world class infrastructure and a reinvigorated property market,” he said.
“With Dubai winning the rights to host the World Expo in 2020, real estate, hospitality, transport and infrastructure will all see substantial new development over the next seven years.”
Globally, office occupancy costs rose 2.2 percent during the 12 months to September 30, up from the 1.4 percent annual growth rate recorded in the year to March 31, according to the report.
Office rents rose the most in the Americas during the year to September 30, at 4.6 percent, followed by Asia Pacific at 3.2 percent and Europe, the Middle East and Africa (EMEA), at 0.4 percent.
“The growth of occupancy costs for prime office space in the past year underscores that even in a slowly recovering economy, demand for the best space in the best locations continues to be strong,” CBRE Research global chairman Raymond Torto said.
The study also found rents are rising fastest in the Americas, where real estate fundamentals continue to improve following a dramatic downturn in 2008-09.
Overall, eight of the 10 markets with the fastest growing occupancy costs were in the Americas, including Boston Downtown, Mexico City and San Francisco Downtown.
CBRE tracks occupancy costs for prime office space in 126 markets around the globe.