The UAE is the most favoured location when selecting a head office in the Middle East, according to an independent survey of senior and upper management in the GCC, commissioned by leading global real estate adviser CB Richard Ellis (CBRE).
Senior and top management surveyed consider Dubai (31 per cent) and Abu Dhabi (21 per cent) the most practical cities for a head office within the region. These statistics help strengthen the importance placed on the UAE as the key location to be established when operating in the Middle East markets.
The survey, conducted for CBRE by Insight Discovery, also reveals that 83 per cent of respondents rent their premises in the GCC and over 70 per cent of top management said that they trust their landlords.
Regional growth (17 per cent) and economic stability (16 per cent) are the overall key factors that top management consider when choosing a Middle East location. Dubai and Abu Dhabi have shown economic growth in the past two years, and this was reinforced with over three quarters of survey respondents stating that their business will grow in the next 12 months.
Nicholas Maclean, Managing Director, CBRE Middle East, commented: “The results of the research conducted are very encouraging for the UAE market, not only by strengthening the significance of Dubai and Abu Dhabi, but also the importance placed on the UAE in the Middle East region by top management. Commercial real estate prices have decreased globally following the economic financial crisis and this will help attract companies to the Middle East when previously the region, especially the UAE, was often considered too expensive to operate in. Another important statistic produced by the survey, is that economic growth has returned to the region. Top managements are optimistic in predicting the growth of their companies and this will be reflected in the growth of the UAE as whole.”
The research reflected that the price of real estate in the UAE is the number one concern of top management when establishing a head office. However, seven out of ten respondents state that head office costs are better now than before the economic crisis, with 76 per cent of respondents allocating 20 per cent or less of their overall operating costs to leasing real estate. According to the latest UAE MarketViews from CBRE, the emergence of new office space in Dubai has resulted in increased competition which has markedly reduced lease rates by up to 17 per cent.
Abu Dhabi has also seen a shift from being a supply-constrained environment, to a market with rising stock levels and greater competition, which could result in further reductions in commercial real estate moving forward.