Aldar buys tower in DIFC in one of Dubai's biggest commercial real estate deals
Deal for office tower makes it one of the biggest in Dubai's commercial real estate
Dubai: In one of biggest deals in Dubai's office real estate, Aldar has bought an under-development tower in DIFC for Dh2.3 billion. The tower was owned by H&H Development. Set for completion in 2028, the tower will include commercial and retail space split across its 40 floors.
Aldar, headquartered in Abu Dhabi, has been bulking up its presence in Dubai, having earlier announced a new office tower on Shaikh Zayed Road as well as two upscale residential communities. This is also Aldar's second office building purchase in Dubai, having earlier acquired the '6 Falak' in Dubai Internet City from Sweid & Sweid.
“Expanding into Dubai’s DIFC marks a significant milestone in our growth, providing Aldar with key exposure to the emirate’s financial centre," said Talal Al Dhiyebi, Group CEO at Aldar. "This acquisition not only diversifies our commercial portfolio but also responds to the sustained demand for high-quality office spaces, driven by a favorable macroeconomic backdrop and the UAE’s position as a global business hub."
Demand for new office - and Grade A options specifically - has been climbing in recent months. The Tecom Group is another who's been extremely active in expanding its already high commercial real estate holdings through deals for existing office blocks, including at Dubai Internet City.
On the new DIFC tower buy, Al Dhiyebi said: "As we continue to expand in Dubai, this tower will serve as a flagship asset, delivering flexible, premium commercial spaces that meet the evolving needs of multinational and regional businesses."
The deal also makes Aldar have office real estate at DIFC and Abu Dhabi's ADGM, the UAE's premier financial hubs. It was in October that Aldar announced two inter-connected commercial towers - the 'One Maryah Place' - at Abu Dhabi's Al Maryah Island. (This is part of its JV with Mubadala.)
Property market sources say that demand for offices at DIFC and its immediate environs show no signs of cooling off. "Even after the 990,000 square feet of workspace that ICD Brookfield brought to DIFC from 2020, any office space in DIFC will have no issue with demand," said a leasing specialist.
DIFC commercial space rents have seen a 'considerable uptick', according to Aldar, and 'driving a 15% year-on-year increase in average Grade A rents in the area'.
Aldar's DIFC entry
H&H Development has multiple projects at DIFC, which includes the Four Seasons Hotel Dubai International Financial Centre and the upcoming Janu Hotel and Residences, which is adjacent to the commercial tower that's been acquired by Aldar.
The consultancy Cushman & Wakefield Core represented H&H Developments in the off-market sale of a 40-floor tower in DIFC. “The strategic location and world-class amenities of the DIFC area continue to drive demand from both international and regional investors,” said David Abood, Co-CEO of Cushman & Wakefield Core.
Designed by Herzog & de Meuron, the tower is targeting a LEED Platinum certification. It will offer flexible floorplates for tenant customization, with a 'blend of multi-tenanted and single-tenanted spaces to suit diverse leasing needs'.
"This underscores H&H Development’s commitment to bringing together the best architects, designers, and operators, which will further enhance the DIFC skyline," said Shahab Lutfi, Chairman of H&H Development.
Heavy deal flow for commercial property
Dubai’s been seeing an uptick in deals involving commercial real estate, whether offices or logistics space. Recently, the Avighna Group completed the acquisition of Emaar Business Park–Building 3 on Shaikh Zayed Road for Dh240 million. The property was owned by Bank Muscat’s Izdihar Real Estate Fund.
Located in The Greens, the G+6 property has around 150,000 square feet of commercial and retail spaces, leased to leading multinational and regional companies. “The acquisition is a strategic step aligned with our vision to expand our real estate holdings globally," said Nishant Agarwal, Managing Director of Avighna Group, whose portfolio includes the 60-storey plus twin-tower One Avighna Park in Lower Parel, Mumbai. "The (Dubai) property’s prime location and blue-chip tenants make it an invaluable addition to our portfolio.”