Dubai tops office rents league table for Middle East and Africa

When compared to other 'global' cities, Dubai is less expensive than London, Hong Kong, New York and Tokyo, where average office space prices are more than triple those being asked in the emirate.

With office space demand significantly outstripping supply in the emirate, average net rents for Central Business District, high-end (Class A) and premium (Top Class A) office space, was US$ 44.86 and US$ 51.65 per square foot per annum respectively.

The high cost of renting office space in Dubai, according to industry sources, is the result of demand outstripping supply. Office rents are expected to stabilise when more than 24 million square feet of office space currently under construction - the second highest figure of any city worldwide - comes on stream.

John Davis, CEO, Colliers International - Middle East, said:

"Despite rising office rent costs, Dubai is still conservatively priced when compared to other major business cities across the globe. When looking at value for money, Dubai still holds a significant advantage for businesses wishing to setup in the region."

Other Middle Eastern cities also ranked high in the findings with Doha's premium office costs averaging US$ 46.88 per square foot and Abu Dhabi's commercial space demanding US$ 37.94 for the same. Riyadh was considerably cheaper coming in at US$ 21.38 per square foot for the city's Top Class A properties.

According to the Collier International's mid-year Global Office Real Estate review, which assesses commercial property markets in 50 countries, London's West End remains the most expensive EMEA city centre location to rent office space after seeing a 14% increase in net prices to US$ 160.67 per square foot.

London's other districts, London City and London Docklands, also boasted high net rates of US$ 96.40 and US$ 73.45 per square foot respectively.

Russia's capital city, Moscow, was the second most expensive EMEA city, commanding rates of US$ 139.41 per square foot for Top Class A properties, followed by Paris, Dublin, Geneva, Zurich, St Petersburg, Milan, Kiev, Zurich and Dubai.

"As anticipated, global office markets in all regions of the world strengthened during the first half of 2006. Spurred by a healthy global economy, office buildings generally experienced improved occupancy and commanded higher rents," said Davis.

Dubai's office rents were also higher than most major cities in North America, with only Midtown New York recording higher costings.

"Dubai has seen a surge in rents over the last couple of years because of massive increases in demand for property. Business is booming in the Middle East and Dubai's leaders have been capitalising on its geographical position and its ability to attract business from across the globe," added Davis.

According to Colliers International, Hong Kong is the most expensive city in the world, with Top Class A office space costing US$ 194.94 per square foot and Tokyo - Central Wards the second most expensive at US$ 161.69 for the same.

India's two main cities, Mumbai and Delhi, also boasted higher rates than Dubai as did Sydney, Australia.