Construction

DIFC Square launched to meet Dubai’s growing office demand

July 3, 2024, 9:48 AM

DIFC Square aims to meet Dubai's demand for high-quality office space, as current levels 'simply won’t be sufficient'

DIFC Square to be 60% office space
Due for handover in Q1 2026
Grade A demand is high

More than 500,000 sq ft of office space is to be added to the heart of Dubai International Financial Centre with the launch of three new towers.

DIFC Square will be built over 1 million square feet, 60 percent of which will be dedicated to grade A office space. At a cost of around $270 million, the project will also devote 17,200 sq ft to retail and restaurants.

Handover has been scheduled for the first quarter of 2026.

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In May ground was broken on the AED1.1 billion ($300 million) 37-storey Immersive Tower by DIFC, which will add almost 60,000 sq ft of office space to the financial district.

DIFC is home to 5,523 companies and gained 1,451 new registrations in 2023 when the free zone’s total workforce increased 15 percent year on year to 41,597.

Satisfying the need for grade A office space has been an issue across Dubai, with demand outstripping supply.

“With only around 1.4 million sq ft of office supply scheduled to be brought online in the Dubai market in the next three years or so, this simply won’t be sufficient to cater to the current levels of demand that we’re currently facing,” said Anthony Spary, head of office investor leasing & retail at CBRE Middle East said.

Office space in Dubai is also commanding premium rental prices.

In the first quarter of the year annual average Grade A rents in the emirate’s central business district, where vacancies hovered around 6-7 percent, increased 22 percent year on year to hit AED2,600 per sq m (10.8 sq ft).

In comparison, the office sector in San Francisco in the US has been badly hit. Vacancies reached a new high of more than 32 percent in the first quarter of the year, while rents remained 30 percent lower than in 2019, real estate company JLL said separately.