Dubai is now being considered as a viable alternative to many European cities due to its handling of the pandemic, balancing an effective inoculation drive, whilst keeping its economy open for business, a new report by global property consultant, Savills said recently.
Dubai has emerged as the location of choice, especially for tech companies, keen to expand in the region, in Savills latest ‘Market in Minutes’ Research.
Meanwhile, the report pointed out that after a year of remote and hybrid working, most corporate occupiers are taking a longer-term view on their real estate requirements. The prolonged uncertainty around sustained global economic recovery has led companies to prioritise flexible leasing options, leading to higher demand for co-working and serviced office space.
A growth in hybrid working models and increase in the number of start-ups will act as a further catalyst going forward, it said.
According to Savills research, employee wellbeing is reflected in corporates’ real estate strategy. While “demand for Grade A space has remained as the preferred options, occupiers are now evaluating the ESG (Environmental, Social and Corporate Governance) compliance of the space they occupy…”
Swapnil Pillai, Associate Director Research at Savills Middle East said: “There has been an increase in the number of companies that have reduced their office space across whilst relocating to newer high-quality developments as they adopt a hybrid working model.
“Their new office space, in many cases 30 percent to 40 percent smaller than their previous take-up, helps to balance a reduction in size against the higher rental levels of better quality and more sustainable space,” he added.
Savills also said that while rental values have declined across secondary office buildings and submarkets in the city, central mature Free Zones and Grade A developments have seen rental values stabilise.
Dubai is widely seen to benefit from the recovery in travel and tourism as well as having vaccinated a majority of its population. The improving outlook for oil prices is also expected to lead to a surge in economic activity.