Existing office space will also become available because of consolidations and relocations
New Dubai office stock set to surge in 2019, says Core Savills
At least 4.4 million square feet of new office stock is predicted to come up for lease in Dubai between now and the end of 2019, according to real estate consultancy Core Savills.
In addition, swaths of existing office space – at least a few hundred thousand square feet – is projected to become available because of corporate consolidation activity and relocations.
The consultancy’s third-quarter office market update for Dubai estimated that 2.2 million sq ft of office stock is predicted to complete in 2018 and 1.89 million sq ft in 2019, following a robust delivery pipeline this year.
Office supply grew by nearly 2.3 million sq ft in the first nine months, the report said, noting an estimated 71 per cent of this was grade A offices, a segment where demand has consistently outstripped supply.
Core Savills’ chief executive David Godchaux said: “Developers are listening to the market, and have significantly slowed the pace of new grade B and C office space. This comes as welcome news for global corporate occupiers, who have sometimes found it difficult to secure the right [prime] office space in the city.”
Prominent deliveries include the remaining portion of One Central at Dubai World Trade Centre; Amesco Tower in JLT, the first phase of Innovation Hub and the almost entirely pre-leased Gate Village 11 in Dubai International Financial Centre.
In 2019, ICD Brookfield Place (a joint venture between sovereign wealth fund Investment Corporation of Dubai and Canadian asset manager Brookfield), and the second phase of Dubai Design District (D3) are scheduled to be brought to market.
Mr Godchaux said it was harder to predict the amount of stock likely to become available because of corporate relocations, but that it was “at least a few hundred thousand square feet”.
For example, over 28,000 sq ft of space is expected to become available in Emaar Square following the merger of NBAD and FGB earlier this year.Meanwhile, HSBC’s move to its purpose-built facility in Downtown Dubai is anticipated to free up space at its current office, also at Emaar Square. The new building now under construction, is expected to offer an additional 60,000 sq ft for lease beyond HSBC’s requirements.
“Many corporates have been instigating build-to-suit requirements as they haven’t been able to find suitable space in the market to date,” Mr Godchaux said.