It’s true, really. It is more affordable to rent premium office space in Dubai than it is in several other global cities. Stats shared in a new report by Jones Lang LaSalle (JLL) show prime office rents in the UAE’s commercial hub Dubai and the nation’s capital city Abu Dhabi are far more affordable compared with their global peers.
JLL’s Premium Office Rent Tracker compares occupancy costs for premium office buildings in 127 areas across the world’s leading real estate markets. The report notes that the region’s largest commercial areas are more economical to rent than Hong Kong, New York, Beijing, London, Tokyo, Shanghai, Singapore, Los Angeles, Mumbai, Boston, Zurich, Geneva, Sydney, Paris and several other cities.
The JLL study looks at prime office rents in Dubai International Financial Centre (DIFC, ranked #36) and Abu Dhabi Global Markets (ADGM, ranked #66). It says prime office rents in Abu Dhabi remained the same as in 2020 at $57 per square foot, which is more than Barcelona, Perth, Amsterdam, Seoul, Chicago, Oslo and Rome among others.
The JLL study looks at office rents in Dubai International Financial Centre (DIFC, ranked #36) and Abu Dhabi Global Markets (ADGM, ranked #66).
Asia-Pacific among most expensive office markets
New York-Midtown’s prime office rents have increased since 2020 to now tie with Hong Kong-Central for the world’s most expensive office market. In 2021, core business districts continued to attract healthy interest from corporate occupiers, the report said. The rental gap between core and decentralised submarkets has widened for the key gateway cities: Hong Kong, New York, Beijing and Tokyo. Cities in the Asia Pacific dominate the top 20 most expensive office markets.
Prime Office Rents: Top 50
| Area | Prime Rent | Area | Prime Rent |
| 1. Hong Kong, Central | $261 | 26. Osaka | $97 |
| 2. New York, Midtown | $261 | 27. Stockholm | $96 |
| 3. Beijing, Finance Street | $196 | 28. Boston | $94 |
| 4. London, West End | $191 | 29. Zurich | $93 |
| 5. Silicon Valley | $174 | 30. Berlin | $89 |
| 6. Beijing, CBD | $152 | 31. Austin | $89 |
| 7. Tokyo, Marunouchi | $150 | 32. Geneva | $88 |
| 8. New York, Midtown South | $148 | 33. Taipei | $87 |
| 9. Shanghai, Pudong | $130 | 34. Sydney | $86 |
| 10. Beijing, Zhongguancun | $123 | 35. Munich | $85 |
| 11. Shanghai, Puxi | $115 | 36. Dubai, DIFC | $84 |
| 12. Tokyo, Shibuya | $115 | 37. Fukuoka | $82 |
| 13. London, City | $114 | 38. Milan | $82 |
| 14. Hong Kong East | $111 | 39. London, Canary Wharf | $82 |
| 15. Singapore | $110 | 40. Luxembourg City | $81 |
| 16. Los Angeles, Westside | $110 | 41. Moscow | $80 |
| 17. Delhi, Connaught Place | $109 | 42. Miami | $80 |
| 18. Shenzhen | $107 | 43. Dublin | $80 |
| 19. Cambridge (Massachusetts) | $106 | 44. Guangzhou | $79 |
| 20. New York, Downtown | $106 | 45. Frankfurt | $78 |
| 21. Nagoya | $105 | 46. Washington DC | $77 |
| 22. San Francisco | $103 | 47. Toronto | $77 |
| 23. Mumbai, SBD BKC | $102 | 48. Ho Chi Minh City | $70 |
| 24. Tokyo, Shinjuku | $101 | 49. Rome | $69 |
| 25. Paris, City | $97 | 50. Oslo | $69 |
Ease of doing business
The UAE has recently relaxed and reformed its residence visa regime. It now welcomes professionals, entrepreneurs, artists, retirees and talented students, among others, to sponsor themselves over the long term. It is the first country in the region to do so. To further leverage that first-mover advantage, the country has also undertaken its largest-ever socio-economic and legal reforms.
Dubai in particular has seen massive growth in new business thanks to the new initiatives. The government’s swift and decisive response to Covid-19 helped Dubai successfully contain the pandemic and maintain its robust economic growth. Lower rents offer additional incentives to local and international businesses to maintain and expand their presence.
Construction activity remained subdued due to the restrictions imposed to counter and contain the pandemic. There were no notable new office space handovers in the third quarter of 2021. The report noted: “Surprisingly, office rental rates grew by 2 per cent on average over the last three months, although net effective rents may have been influenced by additional incentives. Annual changes remained in contraction at 9 per cent…”
Expo 2020 Dubai has lifted real estate demand and rental rates
It added: “As expected, the start of Expo 2020 Dubai has lifted real estate demand and rental rates. However, the currently perceived positive market sentiment is believed to be short-term considering the significant amount of upcoming supply.”
An earlier report by property management company Asteco revealed office rental rates were relatively stable in Q3 2021. Several office buildings provided incentives in the form of rent discounts and payment terms, such as the waiver of service charges and contribution to fit-out costs to boost demand.
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