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30 November 2023

Quality dictates office rents on Sheikh Zayed Road

Emirates Tower, Park Place, Capricorn command the highest rental on Sheikh Zayed Road. (XAVIER WILSON)

By Shuchita Kapur

Office rents on Sheikh Zayed Road vary considerably depending on the location and status of the buildings. It starts as low as Dh75 per square feet on some stretches of the road and goes upto Dh375 a sq ft or Dh400 per sq ft, according to officials.

The primary factors that determine rentals are location and status of buildings, whether shell-and-core or fitted-out, and other facilities such as parking space, grace periods, distance to connector roads, etc, say officials.

"[The highest slab] Dh375 is only in DIFC. Apart from that the rental range is between Dh75 and Dh290 per sq ft," Porush Jhunjhunwala, Head Commercial Leasing at Better Homes told Emirates Business.

The cheapest rents are for offices, which come with a bare structure. "It's Dh75 a sq ft after Mall of Emirates along the SZR for a shell-and-core office. Between Trade Centre Roundabout and Defence Roundabout the rental is between Dh110 and Dh180 per sq ft except the Emirates Tower at Dh290 per sq ft.

"Between the first and third interchanges the rentals are in the range of Dh100 to Dh140 per sq ft. The rental totally depends on the condition of the building, access to the buildings, sizes, status of the office – ie. whether shell-and-core or fitted out, parking, etc," said Jhunjhunwala.

Agrees Jesse Downs, Director of Research and Advisory Services, Landmark Advisory. "The higher end of the office rental range is for new, high-grade buildings usually located in the SZR corridor between the Trade Center and the first interchange (Defense Roundabout). Excluding DIFC, the upper limit is closer to Dh250 per sq ft. The lower limit of the rental range is generally associated with older buildings on SZR between the first and fourth interchanges (Mall of the Emirates)," she added.

According to Brett Whalley, Head of Corporate Services, Asteco Property Management, offices are available on SZR and the first and second roundabouts from Dh150 to Dh230 per sq ft, depending on the fit-out and inclusive of service charges and car parks. The highest values are in the vicinity of Emirates Towers and the first roundabout, whereas, in DIFC, asking rents are between Dh325 and Dh400 per sq ft.

The primary factors that determine commercial rents are location and quality.

According to Downs of Landmark Advisory, "Location, building grade, quality of the individual unit, unit status [shell/core versus fit-outs], vacancy rate in the building, parking allocations and any applicable rent concessions [are important factors]. Rent concessions include free fit-out, grace periods/rent-free periods, and long lease periods, which give firms control of their operating expenditure."

Since the downturn, quality has become a prime factor in determining rents, said Whalley. "Last year we saw tenants turn more picky. It is a 'flight to quality' of which location is important. Tenants request fitted-out offices. The staff want to be close to shops. Walking distance to Metro stations is playing a part as is easy car access to SZR and connector roads to Abu Dhabi," he said.

Jhunjhunwala said buildings such as Emirates Tower, Park Place, Capricorn, etc command the highest rental on SZR. The occupancy levels in these buildings are high (more than 90-95 per cent) and the facilities are good.


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