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Office rents in Dubai are still internationally competitive |
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10/9/2006 9:30:40 AM |
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Dubai is one of the most competitive "global" cities in which to rentoffice space, despite having the most expensive office rents in the Middle Eastand Africa.
With average commercial rents on Dubai's Shaikh Zayed topping $600per square metre per annum compared with $175 for Salam Street in Abu Dhabi,the global findings confirm that, judging by world standards, Dubai'scommercial rents are still reasonable and attractive for internationalcompanies.
The survey,conducted by Colliers International, shows that Dubai is less expensive thanLondon, Hong Kong, New York and Tokyo, where average office space prices aremore than triple those being asked in the emirate.
Average netrents for the Central Business District, high-end (Class A) and premium (TopClass A) office space was $44.86 and $51.65 per square foot per annumrespectively.
The dynamicsof Dubai's buoyant property sector mean that demand for office space continuesto significantly outstrip supply. Developers have recognised this and areconstructing more than 24 million square feet of commercial buildings acrossthe emirate, the second highest figure in the world, after Moscow, and aboveBeijing. Once this supply comes onto the market office rents are expected to stabilise.
ConfirmingDubai's international competitiveness, CEO of Colliers International-MiddleEast, John Davis, said: "Despite rising office rent costs, Dubai is stillconservatively priced when compared to other major business cities across theglobe. When looking at value for money, Dubai still holds a significantadvantage for businesses wishing to setup in the region."
Other MiddleEastern cities also ranked high in the findings with Doha's premium officecosts averaging $ 46.88 per square foot and Abu Dhabi's commercial spacedemanding $ 37.94 for the same. Riyadh was considerably cheaper coming in at $21.38 per square foot for the city's Top Class A properties.
According tothe Collier's mid-year Global Office Real Estate review, which assessescommercial property markets in 50 countries, Hong Kong is the most expensivecity in the world, with Top Class A office space costing $ 194.94 per squarefoot and Tokyo - Central Wards the second most expensive at $161.69 for thesame.
London's WestEnd remains the most expensive EMEA city centre location in which to rentoffice space where there was a 14 per cent increase in net prices to $ 160.67per square foot.
London's otherdistricts, London City and London Docklands, also boasted high net rates of $96.40 and $73.45 per square foot respectively. Russia's capital city, Moscow,was the second most expensive EMEA city, commanding rates of $139.41 per squarefoot for Top Class A properties, followed by Paris, Dublin, Geneva, Zurich, StPetersburg, Milan, Kiev, Zurich and Dubai.
Dubai's officerents were higher than most major cities in North America, with only MidtownNew York recording higher costs. India's two main cities, Mumbai and Delhi,also boasted higher rates than Dubai, as did Sydney, Australia.
"Asanticipated, global office markets in all regions of the world strengthenedduring the first half of 2006. Spurred by a healthy global economy, officebuildings generally experienced improved occupancy and commanded higherrents," said Davis.
The reportalso noted: "Many of the world's financial centres registered double-digitrent increases as multi-national corporations in particular continued to securehigh quality premises in the anticipation of dwindling supply."
In 2007,office markets are expected to moderate slightly but the general trend is stillfor lower vacancy and higher rents. |
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