Strong Demand for High-End Commercial Space
The commercial real estate market in Dubai is experiencing significant growth, particularly in the high-end space segment. This surge in demand is driven by businesses aiming to differentiate themselves and attract employees by offering impressive workplace environments, which make the daily commute worthwhile.
Emirates REIT (CEIC) PLC, the world’s largest Shariah-compliant Real Estate Investment Trust (REIT), managed by Equitativa (Dubai) Limited, is directly witnessing this trend. The need for the commercial area at its flagship Index Tower in Dubai International Financial Centre remains substantial. Occupancy at the iconic 80-storey building, designed by Foster & Partners, continued to rise throughout 2023, reaching 82% in the third quarter of the year. Concurrently, rents experienced significant increases as well.
Prioritizing Premium Workspaces and Employee Experience
Thierry Delvaux, CEO of Equitativa (Dubai) Limited, noted, “There is an interesting dynamic in the market, with strong demand for higher-end commercial leasing. A year ago, the market was primarily driven by companies looking to acquire or expand office space, while keeping a close watch on costs. Now, we observe increased optimism and a heightened emphasis on the benefits that businesses can derive from investing in premium office spaces: such as providing an impressive venue for client meetings, closer access to major regional and international firms, and fostering a happier and more motivated workforce.”
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Convenience and Accessibility Key Factors
Delvaux further emphasized that commercial tenants at Index Tower highly appreciate the prestige and visibility associated with being located in an iconic and easily accessible tower. With Dubai’s white-collar workforce returning to offices in full force, companies are placing greater importance on ensuring convenient access for their employees. This prioritization of ease-of-access underscores the evolving preferences of businesses in the current market landscape.
“Employers recognize the importance of having their staff spend more time in the office to foster collaboration and teambuilding, but they also acknowledge the need for convenient access,” Delvaux elaborated. “They understand that employees are reluctant to spend 30 minutes navigating parking or walking from distant metro stations. Additionally, once in the office, employees appreciate environments conducive to their well-being and motivation. Although these intangible factors may be challenging to quantify, they yield significant returns for employers in a relatively short time frame.”
