With somewhere approaching 80 per cent of its completed office space lying empty, Dubai’s Business Bay area is still struggling to attract the scores of companies it was hoped would be enticed.
The main reasons for such a disparity, according to property analyst Matthew Green, head of research at consultancy CB Richard Ellis, is simple.
“Infrastructure is key,” he says. “If you are leasing a building there at the moment, you are bringing tenants to view the building and you are having to come through a sand pit to get there – that’s not good. Occupiers want to see somewhere that is ready to move in, somewhere where they would want to have their clients,” he explains.
While ongoing improvement work will remedy some of Business Bay’s shortfalls in roads and other infrastructure, Green says that the location is trapped in a chicken-and-egg situation as retailers and corporate firms each wait for the other to make the first move.
“The retailers don’t want to be in there until the offices are better occupied. So the facilities and amenities within the location are again not particularly strong,” he says.
There is an upside, though. Commercial rents in Business Bay are up to 50 per cent less than those in the nearby CBD, something which may lure firms looking for a cheaper option. More info