DIFC Gate occupancy level at more than 95%

Occupancy level in Dubai International Financial Centre’s (DIFC) Gate District has remained at over 95 per cent, while third-party developments within the free zone have leased 58 per cent of their office space, according to a senior government official.

“Occupancy in Gate District (Gate Building, Gate Precinct and Gate Village) remains above 95 per cent. Robust demand from new companies and existing clients increased the occupancy within third party developments such as Currency Tower, Currency House and Liberty House to 58 per cent,” Abdulla Mohammed Al Awar, Chief Executive Officer, DIFC Authority told 'Emirates24|7'.
 
In December 2010, DIFC officials had said occupancy level was at 95 per cent in DIFC owned buildings, while third party developers had leased 35 per cent of their space.

Total leasable commercial space in DIFC’s own buildings stood at 1.217 million square feet as of June 2011, while total commercial office space within third party developers was at 769,000 square feet. DIFC, earlier this year, said approximately two million square feet of commercial office space was likely to be handed over by third-party developers in the next 18 to 24 months.

The centre also announced a new pricing structure in December, offering its tenants over 50 per cent in discounts with the rents starting from Dh160 per square feet to a maximum of Dh280 per square feet in 2011.

Asked if had plans to reduce rents next year, Al Awar said: “The revised pricing structure that we rolled out in 2011 allows clients long term visibility of operating costs by providing better rates for larger spaces and longer leasing periods.

“Our revised pricing structure is only one aspect of the our offer which include independent regulation, common law framework, supportive infrastructure and other free zone benefits.”

He ruled out competition from commercial buildings coming into the market within the free zone, saying: “Third party developments with DIFC allows us to meet the growing demand for space in the centre.”

Jones Lang LaSalle said recently that following a major downward adjustment in rents earlier in 2011, rents within the DIFC have remained stable at between Dh1,615-2,370 per sq m per annum in the third quarter of 2011.
 
CB Richard Ellis said prime rental levels within the DIFC Gate Building range between Dh240 and Dh330 (inclusive of service charge). It also said increased supply in the DIFC estate continued to add pressure to rents for non-DIFC managed buildings, but occupancies and rents in the DIFC Gate developments continued to set the precedent for the entire market in terms of rents and occupancies.
 
Cluttons, a real estate consultancy, however, believed that vacancy rates had risen in the DIFC in the third quarter as a number of commercial buildings in free zone area were brought to the market. However, it did notice increased activity as a number of larger businesses located on the periphery re-locating their satellite offices back into the core DIFC.

Al Awar said that DIFC had already undertaken multiple business development trips this year with senior delegations visiting prospective clients in targeted countries such as India, the UK, the US, Brazil and China.

Asked if there was an expansion plan for DIFC, he said: “Third party developments are continuing on track and we are seeing many residents and companies moving into the finished ones.”

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