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| 28 September, 2017

Dubai’s office skyscrapers still command sky-high rents

They rank 18th in the world despite seeing no change in 2017 first half

Image used for illustrative purpose. 
The Dubai Business Bay skyline. United Arab Emirates, Middle East.

Image used for illustrative purpose. The Dubai Business Bay skyline. United Arab Emirates, Middle East.

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Dubai - Don’t go looking for a cheap rental option in Dubai’s office skyscrapers — there aren’t any available. In fact, the city’s premium high-rise addresses command the 18th most expensive rents in the world, according to latest Knight Frank skyscraper index.

They command, on average, a rent of $44 a square foot, and unchanged — thankfully from a tenant’s perspective — over the first six months of the year.

On why rental gains were flat in the first-half of the year, Matthew Dadd, Partner — Commercial Agency at Knight Frank, said: “Given the range of striking skyscrapers which Dubai has to offer, we do not see a premium paid for higher floors in skyscrapers. Occupiers’ priorities are focused on the efficiency of the floor plates as well as the amenities, vertical transportation and location of the building.”

As for the costliest skyscrapers in the world, they are still the ones in Hong Kong. And that too “by some margin”, with landlords commanding $304 per square foot (psf), followed by those in New York and Tokyo at $162 and $140 a square foot, respectively.

San Francisco, where rents have risen to $117 psf, takes the fifth spot, and ahead of London, which registers $110. London’s showing is all the more remarkable given all the negativity swirling around the City’s chances if post Brexit turns out to be a cropper. But the doomsday scenarios of London’s signature office towers emptying out hasn’t come to pass … But the city with the sharpest gains in office tower rentals was for Toronto’s tenants to bear, rising 11.9 per cent in the first-half of the year to $58 per square foot.

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As for Dubai, more upscale towers are set to emerge — residential, commercial and mixed-use — across the city, with Nakheel expected to launch sales shortly for its new Palm towers, while Shaikh Zayed Road will have Shuaa and wasl properties build the next generation of high quality vertical builds. And that too in a corridor which already has a fair share of them.

And DMCC, the master-developer of JLT, has just confirmed a cluster of towers at Uptown Dubai, two of which will have super-tall credentials. Nakheel, meanwhile, is also scaling up at the Ibn Battuta location.

And slightly away from the city’s established high-rise zones, Dubai Creek Harbour, is playing host to a series of high-rise off-plan launches.

The city’s developers are certainly not going to let go of the skyscraper habit.



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