Dubai is experiencing a surge of interest in office spaces and commercial real estate from thriving local businesses and from international entrepreneurs eager to gain a foothold in the United Arab Emirates, according to several leading UAE companies.
Dubai-based office design and construction firm Janat Office Fit-Out says it has had a huge increase in inquiries recently.
“We are contacted daily from all over the world for advice on where to take space and on local permissions needed, and this has increased fivefold in the first six months of 2023," Janat CEO Nadeem Ahmed told The Media Line.
"This growth is not just coming from businesses new to the country, but also from our existing clients, who are outgrowing their office space due to their business performance.”
Ahmed said the growth is in a wide range of business sectors, including technology, e-commerce, health and wellness, finance, professional services, and manufacturing.
“Source markets where we are witnessing the most interest are European-based businesses who are keen to get a foothold in the UAE market, but we are receiving inquiries from all over the world,” he said.
Securing office space
International real estate advisory firm Chestertons MENA, also based in Dubai, said that while large multinational companies are generally still continuing to rent commercial premises and not buy them, there is a trend of companies buying office space for security and to avoid rent increases.
“Dubai continues to see growing demand for office space," Chestertons Commercial Agency Director Andrew Elliott told The Media Line.
"The UAE’s swift and effective response to the pandemic meant that while COVID restrictions were lifted in Dubai, many other countries were still facing some form of lockdown. As a result, people sought alternative locations so they could continue to operate and grow their businesses. This, combined with geopolitical issues, has made Dubai a key destination of choice for business relocation,” he said.
“The growth in demand for more office space is partly fueled by laws in relation to visas per square foot of office space. As companies grow and recruit more employees, they also need bigger premises to cover the visa allowances in relation to the size of their offices.”
After the global financial crisis in 2008, Dubai was left with an oversupply of office space, and developers turned to building more lucrative residential properties to meet the needs of the growing population.
However, according to Chestertons, there is now a shortfall in commercial space, and in particular A-grade premises. As Dubai’s economic growth continues, the shortage will become more acute and will inevitably lead to price rises.
The city's government has already put in place the Dubai Land Department rental index calculator, an online tool to regulate and standardize rental prices. For existing leases, it acts as a form of market cap, limiting how much a landlord can increase the rent. However, the prices for new leases are not yet regulated in the same way.
Global travel has recovered or almost recovered to pre-pandemic levels around the world, and Dubai is no exception. Dubai recorded 16.73 million overnight visitors in 2019, the year before the pandemic, and 14.36 million overnight visitors in 2022. This year, the number is expected to surpass that.
The UAE's Cabinet Resolution 65 of 2022 re-classified certain visa categories and expanded others to attract more business into the country. In particular, the government streamlined the process to bring in people with technological expertise, opening doors for innovation.
“The UAE's travel landscape is thriving, returning to pre-pandemic levels and beyond," Ali Haider, the regional director of Nomadic, an international company that provides corporate traveler solutions, told The Media Line.
"This resurgence is driven by the country's attractive immigration framework, including international benchmarks like the Virtual Working Program and the Golden Visa, which highlight the country’s appeal for skilled professionals, business owners, and entrepreneurs," he said.
“Our data also suggests that shorter-term trips, such as business visits, are now lasting longer, reflecting a structural change in travel. The UAE’s attractive travel landscape has placed the country in a favorable position for both short-term and long-term travelers, not just aligning with global trends but often leading them, and painting the picture of a thriving, diverse travel landscape.”
Haider said the UAE's progressive approach was fostering business, tourism, and innovation in travel and immigration, leading to the increase in demand for office space.
“The UAE stands out for its multifaceted appeal. Its attractive immigration landscape, coupled with state-of-the-art infrastructure and an inviting and business-friendly environment, attract various types of travelers,” Haider said.