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Williamson ... need for flexible office space now stronger than ever.

Dubai 'spearheading Mena's flexible office space growth'

DUBAI, November 11, 2018

Dubai is leading the way in the trend of introducing flexible office spaces in the Middle East and North Africa (Mena) region, with the emirate offering almost 70,000 sq m of stock in 55 projects, said an industry expert.

This trend is likely to continue with the proportion of office stock offered on a flexible basis increasing from less than five per cent today, to as much as five per cent over the next five years, stated leading global real estate consultancy JLL in its report.

The amount of flexible space in the 20 largest office markets grew by 30 per cent last year alone, stated JLL in its new report titled ‘Disruption or Distraction’ that investigates the flexible office space sector and the challenges and opportunities it presents for companies, real estate investors and developers across the EMEA region.
With flexible space operators now targeting large established corporates, in addition to their traditional focus on freelancers and start-ups, this concept has the potential to disrupt the office market as we currently know it, it added.

According to JLL, Dubai stands out in the Mena region, with 55 projects offering around 70,000 sq m of flexible office space. However, this sector is still relatively small, accounting for less than 1 per cent of the total office space in Dubai, compared to over 3 per cent in key office markets across Europe.

The flexible office market in Dubai is currently dominated by two types of operators, international serviced office operators and landlords, particularly hailing from free zone authorities, it stated.

The major international operators include Regus, ServCorp and My office, that between them operating from 25 locations in Dubai supplying around 27,000 sq m of space, it added.

Dana Williamson, the head of offices and business space, JLL Mena, said: "Dubai is set to embark on the global trend of flexible office spaces, one of the biggest shifts in the real estate industry in the wider EMEA region. With ever increasing focus from occupiers in Mena on new ways of working, the human experience and cost efficiencies, the need for flexible office space is now stronger than ever."

"As a firm, JLL is able to advise occupiers, investors and landlords alike, on how to respond to this shifting focus, allowing office markets in our region to continue to support optimal company operations and new business growth," she noted.

Toby Hall, the director and head of Office and Business Space Leasing in the UAE at JLL, said: "We believe that landlords in the region should be considering flexible space as a viable option to counter the effects of increased vacancies as well as providing an amenity corporates and SME’s increasingly require."

"As regulations are being relaxed in UAE to allow international companies to fully own a business outside of free zones, there is a big opportunity for international workspace operators to enter and grow in the Middle East," noted Hall.

JLL’s global research recognises that flex space could account for as much as 30 per cent of some corporate portfolios by 2013 and we are aware of corporates that are seeking to apply similar ratio’s in respect of their space in Dubai, he added.

Globally, the amount of flex space in the 20 largest flexible office markets grew by 30 per cent in 2017 – equivalent to around 1 million sq m.

According to JLL, the flexible office space will account for 30 per cent of some corporate portfolios by 2030.

Barriers to flex space adoption include concerns around brand dilution, cost, security and confidentiality. But similar risks are associated with non-adoption, around staff retention and attraction, as well as being perceived as stale.

With over 700 flex space providers in the industry, consolidation is inevitable and a downturn would accelerate this process. The well-capitalised and experienced providers with geographical diversification will flourish, as well as innovative and niche operators providing a next-generation offer, it stated.

Craig Plumb, the head of research at JLL Mena, said: "Investors and developers are increasingly adapting to the rise of flexible space in Dubai, by introducing their own concepts or partnering with existing providers. We expect to see a rapid increase in the introduction of flexible space over the coming years, with this trend resonating well with developers and investors keen to exploit new opportunities as the real estate sector adapts to rapid innovation and change."

"Major free zone operators are already including flexible office space, such as Dtech in Dubai Silicon Oasis, Fintech Hub in DIFC and In5 across various Tecom projects. With regulations now easing, more of the future supply now being developed is likely to be offered as flexible office space," he added.-TradeArabia News Service

Tags: Dubai | JLL | Midde East | real estate consultancy |

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