Dubai’s commercial real estate sector is experiencing a significant surge, with a particularly strong demand for luxury office space.
This uptick can be attributed to companies’ endeavors to set themselves apart from competitors and entice employees back to the workplace by offering a working environment that justifies the commute.
Emirates REIT (CEIC) PLC, the arena’s biggest Shariah-compliant Real Estate Investment Trust (REIT), is managed through Equitativa (Dubai) Limited and is nicely privy to this trend.
Index Tower Sees High Demand
Situated in the Dubai International Financial Center, Emirates REIT’s highest quality assets, Index Tower, is experiencing strong demand for commercial space. This top-notch 80-story construction, designed by Foster & Partners, has witnessed a rise in occupancy rates throughout 2023, reaching 82% by the third quarter of the year. Concurrently, rental prices have experienced significant increases during the same period.
Businesses Prioritize Higher-End Offices
“There is an interesting dynamic in the market, with strong demand for higher-end commercial leasing,” said Thierry Delvaux, CEO, Equitativa (Dubai) Limited.
“A year ago, the market was driven more by companies seeking to take on or expand their office space – but with an eye on costs. Now we see greater optimism – and more focus on the value that businesses can gain by investing in a higher-class office: An impressive place to invite clients for meetings, closer proximity to major regional and international companies, and a happier and more motivated workforce.“
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Accessibility and Employee Well-Being Key Factors
Delvaux noted that business tenants at Index Tower value the convenience of having their offices situated in a tower easily accessible by various modes of transportation such as cars, taxis, or the metro.
With white-collar workers in Dubai gradually returning to the workplace in earnest, Delvaux emphasized that businesses are increasingly prioritizing employee accessibility when selecting office locations.
“Employers want their staff to spend more time in the office because they see the value of collaboration and teambuilding that comes with people working in the same space, but they also understand that their employees don’t want to spend 30 minutes trying to access parking or walking a long distance from the nearest metro station,”
Delvaux added. “And when they reach the office, they value being in a space that is good for their well-being and makes them feel motivated. It might be difficult to measure, but these non-tangibles pay off very quickly for employers.“
