Office rents in Dubai are rising for the first time in six years, faster than in New York or London. As international banks and companies, expand into financial hubs known for their adoration of glitzy construction.

ICD Brookfield Place, a skyscraper that soars 928.5 feet (283 meters) above the financial district, is one example of how the emirate is experiencing a rush for office space. Although the tower is 1.1 million sq. ft. of office and retail space opened just as the pandemic began to spread throughout the world. About 90% of it is already occupied or on the market, and the remaining 10% has a long wait list. Among the tenants are UBS Group AG, the Israeli fintech company Rapyd, and Pernod Ricard SA. Which transferred personnel from Hong Kong.

Due to Dubai‘s quick response to the pandemic as well as relatively simple access to visas, the emirate is attracting more wealth and expats. Which is increasing the demand for space in the skyscraper and throughout the city. The rate at which employees are going back to their offices is particularly high. As they relocate their offices from locations like Hong Kong and Russia. An increasing number of businesses are also growing in the sunny business hub.

In “Lifting Up,”

Rob Devereux, CEO of ICD Brookfield, a partnership between Investment Corporation of Dubai and New York-based Brookfield Asset Management Inc claimed. “The entire market is sort of lifting itself up.” He claimed that in comparison to countries like the US and the UK, “we’ve seen the return to the office much stronger.”

The commercial real estate market in Dubai has experienced a significant turnaround. After being one of the hardest hit by the oil-related real estate slump in 2014. For the first time since early 2016, the price of office rentals in the city increased during the Q2 of this year. Through June, prime office rents increased by 7%. While grade a space rents rose 7.2%. On the other hand, lower-grade workspace saw an increase of 3%, according to real estate consultant CBRE Group Inc.

According to CBRE, prime rents increased by 1.4% in the City of London during the second quarter. While they increased by 3% or less in different areas of New York.

Unique Market

Even as other financial centers like New York and London fight to entice workers back to their desks. Dubai stands out in a time when a fierce debate about the future demand for office space has erupted globally.

According to real estate broker Savills Plc, more than 80% of employees in the emirate are back at work as opposed to less than 40% in the London City submarket. At the end of June, the average office utilization rate in the US reached its highest level. Because the pandemic started, hovering around 43%. There is a higher tolerance for commuting in Dubai. Because most people drive and most, live within a half-hour of their workplace, according to ICD Brookfield’s Devereux.

Because so few projects were constructed following the 2014 market slump, there was hardly any new supply. When Dubai offices “started becoming very attractive after covid,” according to Taimur Khan, head of research at CBRE. This developed into a problem because, according to him, “the allocation of visas is linked to the number of units of office space occupied.”

According to Devereux, ICD Brookfield Place now has greater than 100 tenants. Which is a significant increase over a building of comparable size in the US that would typically only have four or five tenants. The tower has 53 floors and 46 elevators, as well as indoor gardens for cooling off in the summer.

Currency Trading

Office space is in high demand even outside of the financial district. Even before the skyscraper is finished, Uptown Tower, which has over 495,000 square feet of premium office space. That has been fully leased in the Dubai Multi Commodities Centre. An influx of blockchain and cryptocurrency companies, as well as traders of Russian commodities, has boosted the free zone and the government agency responsible for overseeing commodities trading. Q2 of this year saw a decrease in prime office space rents in Abu Dhabi, the capital of the UAE.

Rental prices are unlikely to slow down because of the limited supply and the numerous businesses attempting to entice workers back with more enticing office space, according to the head of research and advisory at Core. According to her, approximately 1.5 million square feet will be finished this year and an additional 600,000 square feet in 2023. While there is a limited supply of newly constructed offices, Gurrapu predicted. That more renovated and repurposed office stock would soon be available on the market.