DIFC office rents slashed by 50%

The Dubai International Financial Centre (DIFC), the financial and business gateway between the Middle East and South Asia region and the world, announced today that it was slashing the rents for offices located within the centre by up to 50 per cent in a bid “to enable new and existing companies operating from the centre to continue the growth and expansion of their businesses”.

According to a media statement, the DIFC said the revised pricing structure, which also includes a reduction in operational fees that the centre charges its tenants, is expected to stimulate economic growth by creating a cost competitive business environment in the global financial sector.

While the new rent metrics range between Dh160 ($44) per sq ft and Dh280 ($76) per sq ft depending on the size and location of an office within the complex, a spokesperson told Emirates 24|7 that earlier rentals ranged between Dh300 per sq ft and Dh500 per sq ft.

This in effect means that the revised rentals, which will come into effect from next month onwards, have declined by almost 50 per cent. "If you look at certain times when the markets were booming in 2008 and 2007, you're talking about approximately $200 a sq ft for rents," Marwan Ahmad Lutfi, Deputy CEO and Head of Business Development at the DIFC Authority, told reporters.

“The DIFC has already started applying the revised set of operational fees. The amended rental charges will come into effect starting January 2011 along with new documentation and commercial terms that have been modelled on globally accepted real estate and commercial standards,” the DIFC statement said.

“The number of companies managing businesses from the DIFC has grown to 780 in just six years. Our new pricing structure demonstrates our commitment to support our clients with their growth plans,” said Abdulla Al Awar, CEO of the DIFC Authority.

“We are confident that the overall cost of doing business in the DIFC continues to be competitive with other leading international financial centres, while it reinforces our efforts to remain an integral and important contributor to the UAE's economy,” he said.

“In the past, clients would typically have a representative team in the UAE with the core workforce based overseas. Over the past year, we witnessed the migration of global business desks and the consolidation of divisions, in a growing trend that saw companies utilise the DIFC as their global hub for financial and business operations,” Lutfi added.

“As part of our commitment to strengthening our partnerships with our valued clients, we have ensured that our fees analysis was conducted according to best practice and the highest standards of governance and transparency. We have also taken into consideration the importance of long term visibility of operating costs to both sustain clients and help them plan efficiently for their continuous growth,” Lutfi said.

“The DIFC’s revision of operational fees has focused on reducing the administrative cost associated with establishing and growing a client’s presence in the centre, thus creating an efficient and business-friendly environment,” the statement said. “All services provided by the centre (visa clearance, parking and company registrations) remain benchmarked competitively,” it added.

DIFC’S NEW RENT METRICS

Follow Emirates 24|7 on Google News.