Dubai: The timing of the Dh5 billion Emirates Tower Business Park project couldn’t have got any better. Occupancy levels in the adjoining DIFC cluster are running at near 100 per cent and, not just that, retain the costliest rentals in the city for office premises.
That, by extension, also means inbuilt demand possibilities for the Emirates Tower brand extension. “This is a huge positive for the market as the project will meet the increasing demand for Grade A office space through low- and high-rise office towers catering to a range of requirements,” said Faisal Durrani, Head of Research at Cluttons. “Dubai is moving rapidly from being a regional hub to a global one and the Emirates Towers Business Park is expected to compliment the DIFC, effectively expanding the city’s financial district and putting it on a path to rivalling The City in London, or New York’s Wall Street.”
On the demand side, the free zones continue to dominate in tapping tenant demand, especially among new entrants. “The persistent demand, predominantly from the ever expanding technology-media-telecoms sector has stoked upper limit rents,” states Cluttons’ new Dubai office realty update. In fact, top-end rents at the Internet City, Media City and Knowledge Park gained 5 per cent to Dh220 a square foot (including the service charges).
The new development, which should triple the size of the wider DIFC by 2024, will “provide a welcome source of relief to the dwindling supply of Grade A space in the area”.
According to Paula Walshe, Head of International Corporate Services at Cluttons, states: “With DIFC regulation, and therefore free zone status within this premium zone, the Emirates Towers Business Park will likely relieve demand pressures on core DIFC stock around the Gate, Precinct and Village developments.
Ahead of schedule
Already, international occupiers pay more rent per square foot than any other commercial building in Dubai for office space within the onshore Emirates Towers office building, which is at the heart of this new development. With that in mind we expect demand and rental levels for space in this zone to be strong.”
Demand gains mean new clusters such as the Innovation Hub, which will add 1 million square feet, is actually running ahead of schedule, which means a late 2018 or early 2019 completion. “Much of it is likely to be pre-let, suggesting the upward pressure on rents will persist,” the report adds.
And then again it is not all smooth sailing. Certain transactions that were rated as a shoo-in never materialised. According to Durrani, “Faltering global economic conditions are chipping away at demand, with some reports of deals falling through in recent months due to a more cautious approach being adopted by some multinational organisations. Much of the activity we have been involved with recently has involved a consolidation of operations, across a number of different sectors.”
