Dubai’s media hub is planning to develop additional office space to cope with surging demand after attracting 233 tenants last year.
A homegrown media industry revival and an influx of production companies from conflict-hit countries in the region has driven up occupancy at Dubai Media City, Dubai Studio City and International Media Production Zone.
The three business parks which are operated by Tecom Investments, a unit of Dubai Holding, signed up an additional 622,000 square feet in 2013.
With occupancy at Dubai Media City running as high as 97 per cent, the development is rapidly running out of space.
The growth of Dubai Media City had “exceeded expectations”, said Mohammad Abdullah, managing director of Tecom’s media cluster. That has created the need for some “new projects to cope with demand”, he said in an interview.
Zawya Limited, Sidel and Thomson Video Networks were among the tenants that signed up for office space last year as well as 33 production companies and 23 new media companies. Another 45 freelancers also joined the free zone media cluster.
Tecom said that its media cluster was now home to 2,000 companies. It added that 165 of its existing tenants had also expanded over the year, including Sony Music Entertainment Middle East, FRH, Arabian Radio Network and Publicis.
The company also reported that its Dubai Studio City (DSC) unit had completed construction of three sound stages – sound proof hanger like structures used for film making and television production – which are the largest of their kind in the Mena region.
“2013 was a very strong year for the Media Cluster with widespread growth and expansion across our three business parks,” said Mr Abdullah. “I believe that 2014 has the potential to be another year of strong gowth for both the media cluster and the wider media industry in Dubai.”
According to JLL, rents in the areas owned by Tecom rose as much as 35 per cent in 2013 – higher than rent increases in DIFC (11 per cent), Burj Downtown (14 per cent), Sheikh Zayed Road (27 per cent) and Business Bay (21 per cent).
“The story for Tecom is quite positive. It’s one of the few areas in Dubai where there is not much vacancy – especially in the free zone areas on the beach side of Sheikh Zayed Road where vacancy rate is less than 5 per cent,” said Craig Plumb, the head of research at JLL’s Dubai office.
“In the non free zone areas on the other side of Sheikh Zayed Road there is a lot more vacancy however, with the vacancy rate nearer to 30 per cent,” Mr Plumb added. “In the first quarter of 2014 we have seen rents increase in Tecom and it is becoming the next most popular location after Downtown for office occupiers.
“These are not just media tenants – one of the key successes of Tecom was that it wasn’t limited to Media tenants. In fact much of the demand we have seen recently has been from technology companies and financial services.”
lbarnard@thenational.ae
scronin@thenational.ae
