Sun, Apr 07, 2024 | Ramadan 28, 1445
Published: Sun 5 Dec 2021, 1:02 PM
Last updated: Sun 5 Dec 2021, 3:13 PM
The premium office rents in Dubai and Abu Dhabi are much more affordable when compared to major cities around the globe that compete with the two emirates, according to global real estate consultancy JLL’s latest report.
Despite a slight increase of $3 from the last year’s $81 per sqft, premium office rents in the region’s largest commercial areas are more economical than Hong Kong, New York, Beijing, London, Tokyo, Shanghai, Singapore, Los Angeles, Mumbai, Boston, Zurich, Geneva, Sydney, Paris and many other cities.
The study takes into account premium office rents of Dubai International Financial Centre (DIFC) and Abu Dhabi Global Markets (ADGM).
Premium office rents in Abu Dhabi remained the same as in 2020 at $57 per sqft, making the emirate’s more than Barcelona, Perth, Amsterdam, Seoul, Chicago, Oslo, Rome, among others.
According to Asteco’s third-quarter 2021 report, there were no notable new office space handovers in Dubai during July-September 2021 period.
“Surprisingly, office rental rates grew by two per cent on average over the last three months, although net effective rents may have been influenced by additional incentives. Annual changes remained in contraction at nine per cent in line with slow employment/business growth.
“As expected, the start of Expo 2020 has lifted real estate demand and rental rates. However, the currently perceived positive market sentiment is believed to be short-term considering the significant amount of upcoming supply,” said the report.
In Abu Dhabi, office rental rates were relatively stable over the last three months, but the sector remained challenged.
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“Several office buildings provided incentives in the form of rent discounts and payment terms such as the waiver of service charges and contribution to fit-out costs. Average office rental rates declined by one per cent annually.”
Globally, the JLL study found that New York Midtown’s premium office costs have increased since 2020 to tie for the distinction as the world’s most expensive office market, along with Hong Kong – Central.
In third and fourth place, respectively, are Beijing – Finance Street and London – West End, each of which has witnessed rental declines in local currency terms. Rounding off the Top 5 is Silicon Valley, where premium occupancy costs have risen over the year.
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