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02 March 2024

Where is cheapest office space along Sheikh Zayed Rd?

Photo by Chandra Balan

By Parag Deulgaonkar

For how little can you rent an office on the Sheikh Zayed Road stretch?

The answer is Dh25 per square feet (Dh269 per square metres) per annum - that’s the asking rent for Fortune Executive Tower in Jumeirah Lakes Towers (JLT).

In Gold Tower, JLT, one can rent from Dh65 per square feet, while in HDS Business Centre, JLT, rentals start from Dh75 per square feet.

Market experts say the rates are a direct result of the supply pipeline dynamics in each community. With JLT having commercial strata-owned towers, landlords are competing fiercely to lease their space, leading to steep rental declines.

Emirates 24|7 reported earlier that in 2011 four new commercial towers were handed over in JLT.

Current leasing rates for office space on Sheikh Zayed Road hover between Dh80 per square feet and Dh170 per square feet. The rates vary on the length of the lease period, amount of space being leased and the quality of services in the building.

Experts opine that the secondary office locations will see a further decline in rents due to rising inventory and demanding tenants.

CB Richard Ellis, a global property consultant, in their new report, said lease rates for the secondary market now range between Dh55 per square feet (Dh590 square metres) per annum and Dh130 per square feet
(Dh1,400 square metre) per annum, with the highest rents in this category for buildings in the Tecom area managed by the Tecom Authority and the lowest in locations such as Jumeirah Lakes Towers, Business Bay and Tecom C areas.

It added that secondary market remains under more stress due to the emergence of new supply and the negative implications of strata ownership that is afflicting the majority of emerging accommodation in areas such as Business Bay.

Jones Lang LaSalle, in its Q2, 2012 report, said although prime buildings are witnessing stable rental levels, secondary locations are expected to see further rental decline in the second half of 2012 due to the large new supply and weak tenant demand that is further exacerbating the supply-demand imbalance and the two tier nature of the Dubai office market.

Asteco, said in its H1 report, while the office leasing market is expected to perform better than in previous years, continuous supply will put further pressure on rental rates.

Well-managed developments under single ownership are expected to perform better than strata-owned buildings, the consultancy said.


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