(MENAFN- Khaleej Times) Dubai continues to lead the office space market in the Middle East, as regional and international businesses scope out quality accommodations at competitive prices.
The emirate's current prime office occupancy costs in the first quarter of 2016 stands at Dh280 per square foot per annum, and is ranked 23rd globally, according to CBRE Global Research and Consulting's Global Prime Office Occupancy Costs survey. The Dubai office occupancy ranking has dropped by four when compared to last year, translating to more affordable office rental space. The study also found that Abu Dhabi was ranked as one of the most expensive markets globally in third quarter of 2015 and has now dropped by four ranks according to the global report. Abu Dhabi's current prime office occupancy costs in the first quarter is Dh1,800 per square metre foot per annum. Global prime office occupancy costs increased 2.4 per cent in the year ending the first quarter, reflecting the same rate of growth stated in the previous survey. At the beginning of the year, global stock markets were unstable, but the service sector was not adversely impacted. The study implies that the economic growth is expected to pick up in the coming quarters which will then translate into further occupancy cost increases. Nick Maclean, managing director of CBRE Middle East, said: "We continue to see strong demand from international companies primarily seeking to improve the quality of accommodation and/or its efficiency. The latter point is particularly important for organisations whose staff are spread across several buildings. Dubai's position as first choice for regional new entrants is very important. In addition to direct real estate considerations, the relative depth of the labour pool and the quality of the aviation transport sector are cited as important in corporate decision making." "Overall the market fundamentals in the commercial sector remains positive particularly for well-located buildings of good quality. Poorly located offices with indifferent facilities, particularly those which are badly managed, will struggle against more competitive new stock," he added. According to the CBRE research, Central Hong Kong scored the world's highest-priced office market and Asia continued to dominate the world's most expensive office locations. Shanghai came in at 10th place, and New York moved up to ninth place as the most expensive office market in the Americas, with a prime office occupancy cost of $136.7 per square foot. Central Hong Kong's overall occupancy costs of $290.21 per square foot per year topped the most expensive list. London-Central (West End), with total occupancy costs of $262.29 per square foot; Beijing (Finance Street) at $188.07 per square feet; Beijing (Central Business District) at $181.6 per square foot; and Hong Kong (West Kowloon) at $179.49 per square foot rounded out the top five. The study also found that occupancy costs in Europe Middle East and Africa (EMEA) increased 2.1 per cent year-over-year on an annual basis, on par with the 2.2 per cent gain seen in the third quarter last year. Dublin, Stockholm and Barcelona were the fastest growing markets in the region. Most central and eastern European markets were down year-over-year, including Moscow, which is still in the midst of a recession. Costs accelerated quickly in South Africa, with Johannesburg, Cape Town and Durban all seeing increases of at least 6.9 per cent from year-ago levels. -
Rohma Sadaqat I am a reporter and sub-editor on the Business desk at Khaleej Times. I mainly cover and write articles on the UAE's retail, hospitality, travel, and tourism sectors.Originally from Lahore, I have been living in the UAE for more than 20 years. I graduated with a BA in Mass Communication, with a concentration in Journalism, and a double minor in History and International Studies from the American University of Sharjah.If you see me out and about on assignment in Dubai, feel free to stop me, say hello, and we can chat about the latest kitten videos on YouTube.