Dubai is being considered a viable alternative to many European cities due to its successful handling of the Covid-19 pandemic, according to global property consultant Savills.
“Dubai has emerged as the location of choice, especially for technology companies, keen to expand in the region. More interestingly, it is also now being considered as a viable alternative to many European cities due to its handling of the pandemic, balancing an effective inoculation drive, whilst keeping the Dubai economy open for business,” Savills said in a commentary on Dubai’s office market.
Swapnil Pillai, associate director, research, Savills, said after a year of remote and hybrid working, most corporate occupiers are taking a longer-term view on their real estate requirements.
“Occupiers are more proactive and now initiate discussions with landlords on lease renewals/restructuring — in most cases, well in advance of their lease expiry, based on their future real estate strategy… A prolonged uncertainty around sustained global economic recovery has led companies to prioritise flexible leasing options. This has increased the demand for co-working and serviced office space,” she said.
According to Emirates NBD Research, commercial properties saw a decline in yearly rents in the first quarter of the financial year 2021, largely as ongoing Covid-19 precautions mean many businesses are still urging some employees to work from home to limit the contagion risk.
Office rents were down 17.8 per cent year-on-year and 2.6 per cent quarter-on-quarter. The commercial property market has faced oversupply challenges prior to the pandemic, adding further to the price pressures we are seeing in this segment.
Swapnil Pillai noted that the Dubai office market is poised for growth as it expands in the region, benefiting from companies limiting their spend on capital expense.
Going forward, it said growth in hybrid working models and an increase in the number of start-ups will act as a further catalyst.