UAE suffers from shortage of office space
The demand to offices in the United Arab Emirate is still high due to the intensive economic activity in the various sectors. The high demand meets limited offer, as there are almost no offices ready for renting or purchasing, a situation which leads to a continuing hike in rental fees and to large lines of companies and persons waiting for an office space, mainly in Dubai, according to the Emirates newspaper, Al-Khalij (June 23, 2005).
Renting fees of offices in Sharjah and Ajman rose by 10%-20% compared to the beginning of the year, while renting fees in Dubai continue to rise, registering 100% increase in several regions comparing to last year.
The current capacity of the offices sector in Dubai is 8 million square feet, which are totally occupied, while the market is in need of a similar capacity to cover the shortage. Due to this market conditions, the phenomena of "evacuation" start to be spread, as businessman and companies are forced to pay the owners of the offices money in return to their evacuation. This sum may hit Dh300,000 (some $81,000). The most demanded areas in Dubai are al-Muraqabat, al-Riqa and Sheikh Zayd Street.
The lack of offices for renting causes also an increase in the prices of 1 square meter in Dubai from Dh 40-50 ($10.8-$13.6) to Dh 80-90 ($21.7-$24.5), while in several regions it rose to more than Dh 120 ($32.6), and in Sheikh Zayd Street it can reach even Dh 200 ($54.4) per 1 square feet.
The offered offices are of two kinds: apartment offices, which face huge demand, and open space offices. The offices of the first kind have relatively small area of approximately 500 square feet, while the latter's offices are not smaller than 1500 square feet, and their prices are high. Most of the offices offered at present are for renting, while there is a limited offer of offices for purchasing.