In the first half of 2022, Dubai witnessed an unprecedented surge in business activity, with the Department of Economy and Tourism issuing 46,000 new licenses. This remarkable growth, following the issuance of over 72,000 licenses in 2021, underscores Dubai’s position as an expanding hub for global businesses seeking to establish a foothold in the Gulf region.
The influx of new businesses has led to an increased demand for high-end commercial spaces, particularly Grade A offices. Despite the burgeoning interest, companies desiring to operate onshore face limited choices. Prime locations such as Dubai Marina and Downtown Dubai offer very few prestigious options, in Dubai Marina only two options exist, Marina Plaza, Habtoor Business Tower, and in Downtown; there is Boulevard Plaza, Emaar Square, and the iconic Burj Khalifa, and to my shock Almashreq headquarters building offers such space as well, on lease only though, yet these are few and far between. It is imperative to note that there is good supply in the business bay area, not necessarily the grade A space, however, for infrastructure and traffic reasons, most of the grade A office seekers are shying away from this district as of now.
The big revelation is the demand for premium office space is set against a backdrop of a severe supply shortage. With only 3 million square feet of space anticipated to be completed by 2026, the market is under pressure. The scarcity of Grade A commercial properties in strategic onshore locations underscores the need for strategic planning and investment to meet the growing business community’s needs.
Another significant insight is the fact that ICD Brookfield was an ultra-successful example, the same goes for Uptown Dubai Tower in Dmcc, leasing out the entire massive inventory in a matter of months. However, these examples operate within free zones.
The undisclosed reality that the market is in need of more such high-end properties within on shore business communities, let alone operating within the old business district, like Deira or Bur Dubai. As for freehold developers, these areas are not freehold but still represents a very special opportunity for the local or GCC real estate developers, moreover the opportunity is still up for grabs for the freehold international developers to build a high-end offices.
What has been unconcealed also is applying the new trends within this space, like extra parking bays for sale or rent, creating these extra podiums will pay for themselves and generate hefty premiums hands down, at one point in our Centurion Star Towers, we were generating more sales from the extra parking bays we were “forced” to build, not anticipating this influx of demand we faced, we actually started to package parking bays and the more sought after storage rooms to any non-selling or undesired components in the building, and to our baffled eyes it would still sell like hot cookies on Xmas day.
Any shrewd developer would optimize his sellable area and have no wastage in GFA, however we came to find out that any sharing spaces or communal areas has also shown to immensely increase the value of the property and generate an unanticipated demand, to the point where the developers are being super picky about their tenants and tenant mix.
With several global business wanting to grab a piece of the pie from the thriving economical growth of this region, wanting to operate from the celebrated business capital of the world, Dubai, they are finding it rather difficult to find attached-massive- office space they require within these prestigious areas, in conclusion, if you are a developer and reading this, you know what to do.