Dubai named MidEast's most expensive for offices

Commercial space in emirate is 25th most expensive in world, according to new CBRE list
Dubai named MidEast's most expensive for offices
By Courtney Trenwith
Mon 24 Jun 2013 09:25 AM

Office space in Dubai is the 25th most expensive in the world and leads the Middle East, according to a new report by CBRE Global Research and Consulting.

International demand for high quality office space in the emirate has driven the average annual rental price to $92.57 per square foot.

The most expensive globally is Hong Kong at $235.23 per sqft.

“Despite a high headline vacancy rate [in Dubai], the availability of quality accommodation within prime areas of the city is actually limited, particularly when looking for larger space requirements,” CBRE Middle East Head of Research Matthew Green.

“The lack of high quality offices in the CBD area has seen rents start to slowly rise and this trend is expected to continue for the best quality assets as occupancy rate improves.

“Dubai remains the destination of choice for global businesses looking to enter the region, driven by the prospects of economic, the stable political environment and a truly world class infrastructure.”

No other Middle East city made the top 50 list.

Asia dominated, with five of the top 10, including Beijing (Finance Street) ($194.07) in 3rd, Beijing (Jianguomen – CBD) ($187.06) in 4th, New Delhi ($178.96) in 5th, Hong Kong (West Kowloon) ($173.90) in 6th and Tokyo ($161.16) in 8th.

London’s West End was the second most expensive at $222.58.               

Globally, occupancy costs rose 1.4 percent compared to a year earlier, as modest growth in the Americas and Asia Pacific was partly offset by a slight decrease in Europe.

However, there were significant increases in markets including Jakarta, Indonesia (up 38.9 percent) and suburban Houston, Texas, (21.2 percent).

“While the pace of occupancy cost growth globally has slowed, limited supply of prime space in key core business centers has fueled continuous upward movement of occupancy costs,” CBR global chief economist Raymond Torto said.

“The most expensive office markets often attract the regional headquarters of large multinational firms that require a prime location in a prestigious building with access to major global and regional transit routes.”

The list is based on an analysis of prime office space in 127 markets.

Of the top 50, 21 are in Asia-Pacific, 18 are in Europe, Middle East and Africa and 11 are in the Americas.              

While comparisons in dollars are affected by currency exchange rates, annual percent change calculations are based upon occupancy costs in local currency and are not influenced by currency changes.

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