Dubai’s commercial real estate market is booming, and luxury space is in high demand as companies try to differentiate themselves from the competition and win back employees by providing a work environment worth commuting for.
The largest Shariah-compliant Real Estate Investment Trust (REIT) in the world, Emirates REIT (CEIC) PLC, is run by Equitativa (Dubai) Limited, and it has direct knowledge of this trend. In the Dubai International Financial Center, Emirates REIT’s flagship Index Tower is seeing strong demand for commercial space. The spectacular Foster & Partners-designed 80-story building’s occupancy rate increased in 2023 and reached 82% in the third quarter of the year. Additionally, rents went up significantly at the same time.
“There is an interesting dynamic in the market, with strong demand for higher-end commercial leasing,” said Thierry Delvaux, CEO, Equitativa (Dubai) Limited. “A year ago, the market was driven more by companies seeking to take on or expand their office space – but with an eye on costs. Now we see greater optimism – and more focus on the value that businesses can gain by investing in a higher-class office: An impressive place to invite clients for meetings, closer proximity to major regional and international companies, and a happier and more motivated workforce.”
According to Delvaux, business tenants at Index Tower appreciate having their offices located in a tower that is easily accessible by car, taxi, or metro. Since white-collar workers in Dubai have started going back to work in earnest, Delvaux said that businesses are more likely to prioritize employee accessibility.
“Employers want their staff to spend more time in the office because they see the value of collaboration and teambuilding that comes with people working in the same space, but they also understand that their employees don’t want to spend 30-minutes trying to access parking or walking a long distance from the nearest metro station,” Delvaux added. “And when they reach the office, they value being in a space that is good for their well-being and makes them feel motivated. It might be difficult to measure, but these non-tangibles pay off very quickly for employers.”