UAE near Top 20 in ease of doing business

Going forward, much will depend on how well regulatory changes are effected and make it more attractive for businesses to be here. ‘’As Dubai and the UAE drive changes in legislation and competitiveness on a global level, we are witnessing companies having a Middle Eastern presence,” said Matthew Dadd, Partner-Commercial Leasing & Agency at Knight Frank. “With reforms — including dual licencing — being introduced, this is allowing companies to locate onshore and offshore businesses from the same physical location, thus streamlining operations.”

That office rents in Dubai and Abu Dhabi are still on the softer side is another factor helping businesses manage their costs better. As against the $2,499 (Dh9,171) a square metre it costs to rent an upscale property in Hong Kong, or $1,501 in New York’s super-prime commercial district, in Dubai, this was $751 (as of third quarter 2017.) Grade A occupiers could also demand more from their prospective landlords, with citywide vacancy rates in such buildings at 14 per cent for the same period. In comparison, Hong Kong’s prime office space only had a 1.7 per cent occupancy rate.

A just released Dubai real estate update from Standard & Poor’s says such pressures will continue to be in place. “Average office rents seem to have bottomed out, which may prove sustainable seeing that expected new supply is limited,” it adds. “We foresee a continued stabilisation trend for the office segment. Polarisation continues as rent differentials between “Grade A” properties [highest quality, located in the central business district] and the rest are still significant.”