Developers that can overcome the hurdle of financing will find a growing list of clients for offices
Despite many companies across the Gulf having made swingeing cuts to their workforces over the past 12 months, good quality office space is still in short supply in the region’s commercial hubs.
The development of new office space in cities such as Abu Dhabi, Dubai and Doha has been delayed because cash-starved real estate developers have had to put projects on hold.
The shortage is most acute in Abu Dhabi. Despite the UAE economy slowing down in 2009, and many companies cutting back the scale of their operations, many office blocks in prime locations, such as the ABN Amro building in Abu Dhabi, have enjoyed 100 per cent occupancy since 2002.
To the disappointment of companies seeking downtown offices, the only available commercial space is in the Musaffah industrial zone.
However, more office space should soon come on the market. About 875,000 square metres of space is under construction in Abu Dhabi through major schemes including Sowwah Square, Central Market and Reem Island. In Qatar, 10 towers are being built in West Bay’s Diplomatic District, adding 275,000 sq m of commercial space by the end of the year.
The effect of this additional space becoming available will be a migration of businesses away from the poor quality premises they have been forced to take, helping to make the cities more attractive places to live and work for the business community.
Until the financing market improves, many developers will find they are still unable to deliver their commercial projects. Those that can overcome that hurdle will find a growing list of potential clients seeking high-quality space.