Institutions and corporate companies looking for larger premises to set up or expand their businesses may find themselves struggling to strike deals despite a forecast of oversupply in Dubai office space, according to a leading property agent.
“Leasing in today’s office market is becoming a challenge especially where single buildings have multiple ownership,” said Brett Whalley, Head of Commercial Leasing at Asteco, the largest property services company in the United Arab Emirates and sole leasing agent for phase one of the iconic Ibn Battuta Gate mixed-use development for Dubai-based owners Seven Tides.
Office rents in Dubai multiplied four-fold in less than three years, sparked by investor speculation. However, as a result of the global financial crisis and extreme demand falling off, office rents are in some areas down by more than 40% from their peak in the middle of last year.
“In Dubai many office buildings were sold off-plan, on a floor by floor basis or even by the individual office unit to multiple owners with little thought given to how they were to lease in the future and sometimes with no pantries or washrooms,” said Whalley.
“As offices developments enter the handover stage to the owners, it may be a real struggle for private individual landlords to organise coordinated leasing solutions to companies with larger space requirements. Large tenants – especially those which require a whole floor or even contiguous vertical floors will ideally only want to deal with one landlord,” commented Whalley.
Developments such as Ibn Battuta Gate will not suffer that problem. Its single ownership structure has particular appeal to institutions and companies that require multiple units or several floors in a building with the potential for future expansion.
“In addition large tenants want a streamlined process, from signing the lease to day-to-day management issues,” added Whalley.
The complex, with 40,000 square metres of leaseable modern office space spread over 11 floors, is next door to Ibn Battuta Mall with 300,000 square metres of retail space and entertainment attractions. Ibn Battuta Gate, which features a dramatic entrance arch larger than the Arc de Triomphe in Paris, also has direct access to Sheikh Zayed highway, less than an hour to Yas Island.
Ibn Battuta is also within 400 metres of a Metro station due to open early next year which will provide direct access to the commercial business heart of the Jebel Ali free zones as well as Dubai Marina, Jumeirah Lake Towers, Internet and Media City, Dubai Financial Centre, Dubai World Trade Centre and central Dubai itself.
The office complex has basement parking for over 350 cars and automatic parking for a further 760 vehicles and will also benefit from a five-star Moevenpick Hotel and residence due to open early next year.
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