Office space rentals rise 30% at Jumeirah Lakes Towers free zone

The DMCC registered 1,027 new member companies in the first six months of 2014. Sarah Dea / The National

Dubai Multi Commodities Centre has reported a 30 per cent jump in the number of office tenants renting space at its Jumeirah Lakes Towers free zone.

DMCC, which oversees businesses registered to operate in the 65 blocks of offices and flats in JLT, registered 1,027 new member companies in the first six months of 2014.

The increase brought the total number of companies operating at the free zone to 8,865, 30 per cent more than the same period in 2013, DMCC said yesterday.

DMCC said that the increase in new companies relocating to the free zone grew as trade volumes of gold, diamonds and tea grew steadily while there was also a growth in the number of small and medium-size enterprises setting up in the area attracted by easy set up costs and comparatively low rents.

It reported that the amount of tea passing through DMCC increased from 7.5 million kilograms in the first six months of 2013 to 20 million kilograms in the first half of 2014. And in the first five months of the year, trade volumes of rough diamonds increased by 13 per cent to 63 million carats.

About 70 per cent of DMCC’s free zone members are SMEs, the free zone authority said.

“By driving foreign direct investment we will ensure Dubai remains the regional and international trade and tourism hub,” said Ahmed bin Sulayem, DMCC’s executive chairman.

Local agents report that office rents in Jumeirah Lakes Towers stand at between Dh65 and Dh150 per square foot, making it some of the more affordable modern office space available in the city.

By comparison office rents in Dubai Internet City fetch between Dh140 and Dh220 per sq ft and offices on Sheikh Zayed Road fetch Dh90 to Dh270 per sq ft.

However, the area has suffered from the fact that many of the office towers in the free zone have been sold off piecemeal to multiple occupiers and are currently held in “strata ownership”. This makes it complicated for companies that want to occupy large amounts of space because they might have to deal with multiple landlords.

“Three years ago JLT was a complete no-no for corporate occupiers looking to locate in Dubai,” said Paula Walshe, the head of international corporate services at Cluttons. “Back then we were offering companies space on zero rents with the only costs being service charge and fit out costs.

“Today all that has changed and JLT is a completely different place,” Ms Walshe said. “The free zone is known as very flexible and easy to do business with which is very attractive to new start-ups and to businesses coming to Dubai for the first time. It’s never going to compete with the likes of DIFC or Tecom but it’s a good medium-range location.”

DMCC reported that its planned Burj 2020 District which is designed to include Burj 2020, the world’s tallest commercial tower, was “well under way.” It said that four global design firms were currently participating in a Masterplan design competition with groundbreaking planned in 2015.

It added that it was also about to start marketing its new 14 storey One JLT commercial tower, which is currently under construction and is due for completion in 2015.

Follow us on Twitter @Ind_Insights