Office space tenants can increasingly expect landlords to offer appealing terms from landlords in Dubai as sentiment in the office real estate sector improve, according to real estate consultancy JLL.
According to a Q2 report from JLL on the UAE’s property market, the completion of phase I of Dubai Internet City’s Innovation Hub and one tower of Dubiotech Headquarters in Dubai Science Park brought the total office stock to around 8.6 million sq m of gross leasable area.
By the end of 2021, office supply is expected to reach 9.26 million sq m, with notable projects including ICD Brookfield Place in DIFC and Dubai Hills Square.
In an interview with Arabian Business, Mena research associate Dana Salbak said that the UAE – particularly Dubai – have introduced a number of initiatives that have helped bolster business sentiment in the office sector.
These include the ‘One Free Zone Passport’ announced by the Dubai Free Zone Council, which allows companies registered with any single free zones to operate in other zones in Dubai without additional licenses.
Additionally, Dubai Municipality has reduced market fees imposed on businesses from 5 percent to 2.5 percent and changes to laws that will allow 100 percent foreign ownership of businesses outside free zones.
“In terms of the initiatives that are being introduced in the office market, they’ve been more effective than what was been introduced in the residential market so far,” Salbak said. “These initiatives…have more of an impact to improve business sentiment.”
Additionally, Salbak said that the initiatives will be particularly beneficial for entrepreneurs and SMEs.
“That’s the direction of Dubai, focusing on entrepreneurs and SMEs,” she added. “This all helps these sectors and benefits them by cutting back on costs and allowing them to operate more freely in the emirate.”
The JLL report noted that at the moment less than 1 percent of all office space in Dubai is taken up by co-working space. In other global cities, such as London, the figure hovers around 10 percent.
Salbak said that the amount of co-working office space in Dubai is likely to grow over the coming years.
“It’s a global trend, and we’re seeing the impact of that in Dubai,” she said. “It’s part of being more flexible and encouraging businesses and start-ups, tapping into that market. If you allow co-working spaces, you don’t have to worry about rent and certain registration fees. It promotes demand and we do expect it to grow.”
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.