Latest news with #TobyHall
Khaleej Times
4 days ago
- Business
- Khaleej Times
Dubai office rents soar amid tight supply, strong demand
Dubai's office market is thriving, driven by strong demand, limited supply, and a surge in rental prices, positioning the emirate as a global hub for business and innovation. According to Savills' latest Dubai Office Market report, average year-on-year rental price growth soared 45 per cent across various sub-segments in 2025, with key business districts like the Dubai International Financial Centre (DIFC), Business Bay, Downtown Dubai, and TECOM leading the charge. DIFC, in particular, boasts an impressive occupancy rate of 98 per cent, underscoring the intense competition for premium office space. The city's Grade A office spaces are in high demand from both regional and international occupiers, fueled by Dubai's strategic appeal as a gateway to the Middle East, Africa, and Asia. Savills reports a 4.9 per cent increase in net effective occupier costs in Q1 2025, encompassing base rent, fit-out expenses, and other leasing costs. This places Dubai as the eighth most expensive prime office market globally, with average costs of $148.90 per square foot per annum. 'This growth reflects confidence in Dubai's long-term positioning,' said Toby Hall, head of Commercial at Savills. 'Companies view Dubai not just as a regional base but as a global node for innovation, finance, and enterprise.' Core sectors such as financial services, consulting, and technology and media are driving demand, accounting for the majority of market transactions. However, the supply of quality office space remains critically low, with Cushman & Wakefield Core projecting an undersupply until 2027-2028. While new office supply is set to double in 2025, adding 1.66 million square feet, much of this is already pre-leased due to unrelenting demand. DIFC alone will contribute nearly one-third of the city's office supply over the next three years, with most spaces expected to be occupied before completion. Dubai's office market holds the second-highest global occupancy rate at 92 per cent, projected to exceed 94 per cent by the end of 2025. In 2024, office rents surged by 22 per cent year-on-year, with forecasts predicting an additional 10-12 per cent increase in 2025. This growth is fuelled by an influx of new businesses and foreign companies drawn to Dubai's status as a trade, tourism, and financial hub. A CBRE report highlights that the chronic undersupply of quality space in prime locations has intensified competition, pushing rental rates up by over 20 per cent annually and creating challenges for tenants during lease renewals. Despite the tight market, landlords are adapting to meet evolving occupier needs. In established districts, where Grade A stock is scarce, property owners are offering tailored leasing terms, enhanced amenities, and refurbishments to attract tenants. In Business Bay, some strata landlords are now quoting rents comparable to DIFC, reflecting a broader uplift in perceived value across sub-markets. Meanwhile, lease renewals remain a popular choice for businesses, particularly outside DIFC, where Rera rental protections provide stability in a rising cost environment. Occupiers are also prioritizing functional layouts and long-term adaptability over expansive or elaborate office designs, optimizing space usage to align with modern workplace trends. While the outlook for Dubai's office market remains robust, with strong fundamentals and sustained occupier interest, the persistent undersupply poses challenges, as new deliveries in 2025 — approximately 100,000 square metres — are unlikely to alleviate pressure significantly. Most of these spaces will be pre-leased, leaving little room for new entrants or expanding businesses.
Hi Dubai
08-05-2025
- Business
- Hi Dubai
Dubai's Office Market Enters New Growth Phase Amid Surging Demand for Prime Spaces: Savills Report
Dubai's office market continues to demonstrate strong fundamentals, with rising demand, increased occupier activity, and a dynamic shift in market behaviour. According to Savills' latest Dubai Office Market in Minutes – Q1 2025, the emirate has entered a new phase of growth, characterised by elevated rental price levels, reduced vacancy, and increasing competition for prime commercial space. Dubai saw average year-on-year office rental price growth of 45% across 22 sub-markets in Q1 2025. Key business districts such as DIFC, Business Bay, Downtown Dubai, and TECOM are performing particularly well, with occupancy rates in DIFC reaching 98%. As a result, well-located, Grade A spaces are increasingly sought after by both regional and international occupiers. In parallel, Dubai recorded a 4.9% rise in net effective occupier costs in Q1 2025, as outlined in Savills' global cost benchmarking report. This metric captures the total cost to occupiers, including base rent, fit-out expenses, and other related costs, offering a more comprehensive view of overall leasing expenditure. The increase places Dubai among the most active and competitive prime office markets globally. The city now ranks 8th globally for total prime office occupancy costs, averaging USD 148.90 per sq ft per annum, a reflection of the emirate's continued appeal as a gateway hub for the Middle East, Africa, and South Asia. This growth reflects confidence in Dubai's long-term positioning. Companies are looking at Dubai not just as a regional base, but as a global node for innovation, finance, and enterprise. The rise in rents and costs mirrors the demand for quality and the limited availability of premium space. said Toby Hall, Head of Commercial Agency at Savills Middle East. Demand continues to be driven by core sectors such as financial services, consulting, and technology & media, which accounted for more than half of Savills' transactions in Q1. Smaller, agile companies are also increasingly active, particularly in sub-markets offering value and accessibility, including Dubai South and Expo City. The Dubai Chamber of Commerce welcomed 70,500 new companies in 2024, marking a 4.6% increase year-on-year and further signaling growing confidence in the business environment. As new entrants look for flexible, well-connected, and high-specification workplaces, many are turning to serviced office operators, who continue to expand into community-centric and mixed-use locations. While the supply of Grade A stock remains tight in established districts, landlords are responding proactively, offering more tailored leasing terms, enhanced amenities, and refurbishment strategies to meet evolving occupier expectations. Some strata landlords in Business Bay, for instance, are now quoting rents comparable to DIFC, underscoring the broader uplift in perceived value across sub-markets. Lease renewals remain a preferred option for many businesses, particularly outside DIFC, where RERA rental protections provide added stability in a rising cost environment. Occupiers are also reviewing how space is used, prioritising functional layouts, optimisation, and long-term adaptability over expansive floorplates or elaborate fit-outs. Looking ahead, new office developments are in the pipeline, although most are already seeing significant pre-commitment levels. This indicates continued market confidence and suggests that competition for high-quality space will remain a key theme through 2025. Dubai's office market is evolving, not tightening. The data shows growing maturity, where rental increases reflect sustained interest, strong business fundamentals, and a shifting view of Dubai as a long-term destination for global enterprise. added Hall. Read the complete findings of the reports here: Dubai Office Market Q1 2025 and Global Occupier Markets: Prime Office Costs – Q1 2025 News Source: Savills Middle East
Arabian Business
07-05-2025
- Business
- Arabian Business
Dubai office rents up 45 per cent
Dubai's office market continues to demonstrate strong fundamentals, with rising demand, increased occupier activity, and a dynamic shift in market behaviour, according to Savills latest Dubai Office Market in Minutes – Q1 2025. The emirate has entered a new phase of growth, characterised by elevated rental price levels, reduced vacancy, and increasing competition for prime commercial space, said Savills. Dubai saw average year-on-year office rental price growth of 45 per cent across 22 sub-markets in Q1 2025. Dubai office market Key business districts such as DIFC, Business Bay, Downtown Dubai, and TECOM are performing particularly well, with occupancy rates in DIFC reaching 98 per cent. As a result, well-located, Grade A spaces are increasingly sought after by both regional and international occupiers. In parallel, Dubai recorded a 4.9 per cent rise in net effective occupier costs in Q1 2025, as outlined in Savills global cost benchmarking report. This metric captures the total cost to occupiers, including base rent, fit out expenses, and other related costs, offering a more comprehensive view of overall leasing expenditure. The increase places Dubai among the most active and competitive prime office markets globally. The city now ranks eighth globally for total prime office occupancy costs, averaging $148.9 per sq ft per annum, a reflection of the emirate's continued appeal as a gateway hub for the Middle East, Africa, and South Asia. Toby Hall, Head of Commercial Agency at Savills Middle East, said: 'This growth reflects confidence in Dubai's long-term positioning. Companies are looking at Dubai not just as a regional base, but as a global node for innovation, finance, and enterprise. 'The rise in rents and costs mirrors the demand for quality and the limited availability of premium space.' Demand continues to be driven by core sectors such as financial services, consulting, and technology and media, which accounted for more than half of Savills transactions in Q1. Smaller, agile companies are also increasingly active, particularly in sub-markets offering value and accessibility, including Dubai South and Expo City. The Dubai Chamber of Commerce welcomed 70,500 new companies in 2024, marking a 4.6 per cent increase year-on-year and further signalling growing confidence in the business environment. As new entrants look for flexible, well-connected, and high-specification workplaces, many are turning to serviced office operators, who continue to expand into community-centric and mixed-use locations. While supply of Grade A stock remains tight in established districts, landlords are responding proactively, offering more tailored leasing terms, enhanced amenities, and refurbishment strategies to meet evolving occupier expectations. Some strata landlords in Business Bay, for instance, are now quoting rents comparable to DIFC, underscoring the broader uplift in perceived value across sub-markets. Lease renewals remain a preferred option for many businesses, particularly outside DIFC, where RERA rental protections provide added stability in a rising cost environment. Occupiers are also reviewing how space is used, prioritising functional layouts, optimisation, and long-term adaptability over expansive floorplates or elaborate fit-outs. Looking ahead, new office developments are in the pipeline, although most are already seeing significant pre-commitment levels. This indicates continued market confidence and suggests that competition for high-quality space will remain a key theme through 2025. Hall said: 'Dubai's office market is evolving, not tightening. The data shows growing maturity, where rental increases reflect sustained interest, strong business fundamentals, and a shifting view of Dubai as a long-term destination for global enterprise.'
Zawya
06-05-2025
- Business
- Zawya
Dubai Office Market enters a new growth phase as prime space demand intensifies: Savills
Dubai's office market continues to demonstrate strong fundamentals, with rising demand, increased occupier activity, and a dynamic shift in market behaviour. According to Savills latest Dubai Office Market in Minutes – Q1 2025, the emirate has entered a new phase of growth, characterised by elevated rental price levels, reduced vacancy, and increasing competition for prime commercial space. Dubai saw average year-on-year office rental price growth of 45% across 22 sub-markets in Q1 2025. Key business districts such as DIFC, Business Bay, Downtown Dubai, and TECOM are performing particularly well, with occupancy rates in DIFC reaching 98%. As a result, well-located, Grade A spaces are increasingly sought after by both regional and international occupiers. In parallel, Dubai recorded a 4.9% rise in net effective occupier costs in Q1 2025, as outlined in Savills global cost benchmarking report. This metric captures the total cost to occupiers, including base rent, fit out expenses, and other related costs, offering a more comprehensive view of overall leasing expenditure. The increase places Dubai among the most active and competitive prime office markets globally. The city now ranks 8th globally for total prime office occupancy costs, averaging USD 148.90 per sq ft per annum, a reflection of the emirate's continued appeal as a gateway hub for the Middle East, Africa, and South Asia. 'This growth reflects confidence in Dubai's long-term positioning,' said Toby Hall, Head of Commercial Agency at Savills Middle East. 'Companies are looking at Dubai not just as a regional base, but as a global node for innovation, finance, and enterprise. The rise in rents and costs mirrors the demand for quality and the limited availability of premium space.' Demand continues to be driven by core sectors such as financial services, consulting, and technology & media, which accounted for more than half of Savills transactions in Q1. Smaller, agile companies are also increasingly active, particularly in sub-markets offering value and accessibility, including Dubai South and Expo City. The Dubai Chamber of Commerce welcomed 70,500 new companies in 2024, marking a 4.6% increase year-on-year and further signalling growing confidence in the business environment. As new entrants look for flexible, well-connected, and high-specification workplaces, many are turning to serviced office operators, who continue to expand into community-centric and mixed-use locations. While supply of Grade A stock remains tight in established districts, landlords are responding proactively, offering more tailored leasing terms, enhanced amenities, and refurbishment strategies to meet evolving occupier expectations. Some strata landlords in Business Bay, for instance, are now quoting rents comparable to DIFC, underscoring the broader uplift in perceived value across sub-markets. Lease renewals remain a preferred option for many businesses, particularly outside DIFC, where RERA rental protections provide added stability in a rising cost environment. Occupiers are also reviewing how space is used, prioritising functional layouts, optimisation, and long-term adaptability over expansive floorplates or elaborate fit-outs. Looking ahead, new office developments are in the pipeline, although most are already seeing significant pre-commitment levels. This indicates continued market confidence and suggests that competition for high-quality space will remain a key theme through 2025. 'Dubai's office market is evolving, not tightening,' added Hall. 'The data shows growing maturity, where rental increases reflect sustained interest, strong business fundamentals, and a shifting view of Dubai as a long-term destination for global enterprise.'
Arabian Business
10-02-2025
- Business
- Arabian Business
AB Majlis podcast: Major London exodus fuels Dubai's premium office boom, says Savills' Toby Hall
Dubai's transformation from a market plagued by office oversupply to a destination that's drawing London's top firms represents one of commercial real estate 's most dramatic shifts, according to Savills Middle East's head of commercial agency. The emirate's reimagining of premium office space has created such acute demand that some areas are seeing rental values surge by up to 44 per cent year-on-year, with Business Bay emerging as a prime example of this market evolution. 'The levels of demand for offices then versus now just don't even compare,' said Toby Hall, who recently joined Savills Middle East after his tenure in London's West End market. 'There was a huge oversupply of offices then. There were buildings that we thought would never lease, had been empty for years. Those buildings have leased now, and they're renting for two, three times what those rents were.' This market transformation is epitomized by ICD Brookfield Place, which Hall worked on for seven years during his previous role. 'The specification is far higher than anything else that had been built in the Middle East previously. It's a higher spec building than lots of other cities in world mature markets,' he explained. Dubai's office market growth Despite Dubai's soaring rents, the emirate maintains a significant cost advantage over London. Hall pointed out that prime office space in London's key submarkets like Mayfair commands rents of '90 to 100, up to 150 pounds per square foot per annum' – substantially higher than Dubai's premium rates. The shift isn't just about cost savings. A new breed of office development in Dubai is emphasising sustainability and workplace culture. 'Companies are getting closer to having criteria which they have to tick when they do their office move,' Hall noted, highlighting how sustainability credentials are increasingly driving tenant decisions. For investors who showed patience during leaner times, the rewards have been substantial. Hall cites a client in DIFC whose office sat empty for five years: 'It rented at 80 dirhams a square foot. Now he's getting 300.' Looking ahead, Hall identifies a critical supply shortage in Dubai's premium office segment. While new developments are underway, including major projects in DIFC and Dubai Science Park, demand shows no signs of slowing. 'This doesn't seem to be any slowdown in the growth here. The economic growth seems to be continuing,' he said. The market dynamic represents a stark contrast to London's current situation, where hybrid working patterns have left some areas struggling with occupancy. 'London on a Friday is kind of sad to see sometimes,' Hall reflected, noting how Dubai maintains a more office-centric work culture that continues to drive demand for premium space. Tune in to AB Majlis every Monday To listen to the full episode and gain a comprehensive understanding of doing business in the Gulf region, visit our RSS feed or check out AB Majlis on Spotify, Apple Podcasts, and other platforms. Episodes are also available on: Tune in every Monday for weekly episodes that will help you stay ahead of the curve and enrich your understanding of the Gulf region.
