Latest news with #office space
Khaleej Times
22-07-2025
- Business
- Khaleej Times
Dubai developers return to selling office space to individual investors
Developers in Dubai are once again offering commercial office space to individual investors, responding to rising demand as the off-plan office segment experiences a resurgence in select submarkets. 'There was a time when entire office buildings in Dubai were sold off-plan. Over time, the model shifted toward developers constructing buildings solely for rental purposes, moving away from strata ownership,' said PP Varghese, head of professional services at Cushman & Wakefield Core. 'After 2010, we saw a return to strata ownership, where individual investors could purchase office units within developments. However, that again changed following the economic downturn, with developers choosing to retain full ownership and lease to corporate tenants. Independent ownership largely disappeared. Now, we're seeing a shift back — office buildings are being sold off-plan once more, much like residential properties,' he told Khaleej Times. Varghese attributed this trend to renewed investor confidence in the office sector, supported by strong performance indicators. 'There's a robust belief in the segment, with average occupancy rates hovering around 92 per cent and 95 per cent for Grade A offices,' he noted. 'From 2013 to 2015, confidence in the office market was low, prompting developers to avoid strata sales. But the situation has changed. The market is much more resilient now, and individual investors are re-engaging. That's why developers are reintroducing this product.' The re-emergence of commercial off-plan sales is primarily occurring in fringe submarkets like Arjan and Motor City, Varghese added. 'While this creates strata-based inventory for small and medium-sized enterprises (SMEs), it doesn't alleviate the shortage of institutionally owned Grade A stock — the type preferred by global tenants and institutional investors,' he said in the firm's mid-year 2025 market update. Developers are also financially incentivised to pursue sales. 'If developers can achieve the right sales price, they can recover capital faster. From a return-on-investment perspective, it becomes a more lucrative strategy,' Varghese explained. Landlords in control Real estate consultancy JLL also reported growing appetite among developers to build new office stock and refurbish outdated assets to take advantage of supply-demand imbalances. 'Landlords are substantially raising quoted rents, creating a widening gap between asking prices and tenant expectations,' JLL noted. Dubai's office market continues to attract strong interest from both newly established local startups and international corporations looking to establish a presence in the emirate. According to Cushman & Wakefield Core, key districts such as Dubai International Financial Centre (DIFC), One Central, Sheikh Zayed Road, and Dubai Design District (D3) are nearing full occupancy. This surge in demand has driven up office rental rates, with average rents reaching Dh190 per square foot — a 22 per cent year-on-year increase. In Q1 2025, prime office rents rose by 14.2 per cent, reflecting robust market conditions. Real estate brokerage Cushman & Wakefield Core's forecasts indicated that just 0.89 million square feet of new commercial space is expected to be delivered in 2025. However, the pipeline expands significantly in 2026 and 2027, with a combined 6.4 million square feet currently under development. According to JLL, most of this upcoming supply is concentrated in prime locations and will predominantly feature Grade A specifications.
Daily Mail
06-05-2025
- Business
- Daily Mail
IWG sees record demand for office space despite tariff threat
Office space provider International Workplace Group enjoyed record demand in March, despite rising global uncertainty resulting from US tariffs. IWG revealed its turnover was broadly flat at $909million (£683million) in the three months ending March, while system-wide revenue rose by 2 per cent to over $1.05billion. Sales in its managed and franchised division jumped by 23 per cent to $171million, supported by room openings surging by 41 per cent year-on-year to 202,000. IWG, which owns the Regus brand, expects the run-rate of managed and franchised room and centre openings to rise in the second quarter. The FTSE 250 company anticipates delivering $1.5billion of system-wide revenues annually 'once these rooms are all open and mature'. Although the group said it was cautious due to the current macroeconomic backdrop, it noted that recent tariffs had not yet affected signings or openings. President Donald Trump has introduced a 10 per cent baseline tariff on imported US goods, as well as a 25 per cent tax on steel and aluminium products and a massive 145 per cent tariff on Chinese-made goods. These measures have incited turmoil in global markets and heightened the chances of a global recession happening this year. But IWG continues to expect its earnings before nasties will total between $580million and $620million this year. Mark Dixon, founder and chief executive of IWG, said: 'I am delighted with our start to 2025 despite uncertainty globally. 'March was a record sales month, and lead indicators such as enquiries and tours are running at all-time highs in the US despite the challenging macroeconomic backdrop. 'We continue to see signings and openings grow as we further expand our network and coverage, allowing the flywheel of our business model to keep delivering greater cashflow whilst requiring less capital to grow than historically.' IWG also declared on Tuesday that it was doubling its existing share buyback scheme to $100million, with the previously-announced $50million set to be finished by early August. Analysts at Barclays said: 'While the uncertain economic environment is not helpful, we believe the group is well placed and should continue to see growth, absent a major global economic shock.' IWG shares were 0.8 per cent higher at 189.8p on Tuesday morning, meaning they have increased by around 16 per cent since the year started.
