The tech, media and telecoms sectors are the “star performers” in Dubai’s offices sector, driving take-up levels and showing no sign of a slow-down in a market that is otherwise correcting itself.
According to the spring issue of Cluttons’ Dubai property market outlook, the TMT sector has seen high levels of activity, while international corporate occupiers in other sectors have delayed decisions to expand their office footprints.
Recent high profile deals in Dubai reflect the surge of interest in tech, driven by strategic government initiatives such as the Dubai Future Foundation, the Hyperloop transportation system, and 3D printed skyscrapers.
Last week it was reported that Dubai’s largest publicly traded property developer, Emaar, made a $500m bid against Amazon for online retailer Souq.com, reflecting the investments in technology in the region.
Prior to that, Dubai-based construction technologies firm Cazza announced plans to build the world’s first 3D printed skyscraper.
Cazza chief executive Chris Kelsey will speak at EG’s Middle East Real Estate Forum in Dubai on 26 April.
Faisal Durrani,head of research at Cluttons, said: “TMT is the only part of the office market still expanding, with stability in rents supported by a limited supply pipeline.
“Global uncertainty, with Brexit and Donald Trump’s election, have meant that international corporate occupiers have stalled their expansion plans, and consolidation activity has slowed, but the TMT, along with the pharmaceuticals sector, are the star performers.
“Free trade zones such as TECOM’S Internet City and Media City are in high demand as rates are minimal, and while rents are holding steady now, they will creep up as occupier expansion plans are brought forward.”
The Cluttons report also cites Dubai’s financial hub, the DIFC, as a key area for the TMT sector, with occupier demand reflected in its eight-storey Gate Village 11 Building, The Exchange, which has been reportedly pre-leased, with completion not expected until late 2017 or early 2018.
Meanwhile, the residential market in Dubai has entered a correction phase after a 22% spike in capital values in a single quarter during summer 2013, as investors priced in a positive outcome for Dubai’s Expo 2020 bid.
The Dubai market leading into Expo 2020, as well as Middle Eastern investment into the UK, will be core themes of the EG event in Abu Dhabi and Dubai on 25 and 26 April.
The event is being held in partnership with the UK Department for International Trade, and Cluttons, and a UK delegation of real estate leaders will be travelling there to strike investment deals.
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