Challenges and solutions in Dubai’s commercial real estate sector

The commercial real estate sector in Dubai is finally getting some relief as several new projects are launched in various areas around the emirate, specifically in Dubai Hills. Developers have begun reexamining potential solutions to the supply crisis in commercial property in the emirate, choosing to bypass certain government bottlenecks by building in the suburbs or even designing more flexible office options, such as co-working spaces and innovative layouts, to meet the needs of the modern worker.

Dubai’s reputation as a global business hub, and the subsequent relocation of droves of foreigners and businesses, has catapulted the demand of office space in the emirate. This demand is far surpassing developers’ ability to build, as the governmental approval processes are less-than-optimally streamlined. These challenges require developers to actively plan long-term strategies in anticipation of future market trends and needs. This will also require that the planning and construction of commercial property be sped up in order to more quickly fill the gap in supply and demand.

Another way to combat the commercial real estate market crisis is to consider alternative options. These are mainly flexible office solutions, such as co-working spaces in residential complexes or cafes, or innovative layouts that can more easily adapt to the needs of the modern, post-pandemic worker.

With the skyrocketing costs of real estate in the city, developers are also looking toward the suburbs to introduce more offices and other commercial centres. This would help alleviate the financial burden the developer faces when considering the cost of construction, and, ultimately, lessen the final cost for the interested buyer or renter. Not only could building in the suburbs result in more budget-friendly commercial property, it could also diversify the risk for investors, explore emerging markets, expand businesses, and contribute to the success of the overall project.

Taking into consideration the challenges developers face in lessening Dubai’s commercial property supply crisis, the real estate market as a whole is only gaining momentum. Several commercial developments were recently launched, including four new office buildings in Dubai Hills Business Park and another two blocks in Park Heights Square, also located in Dubai Hills. The government’s ongoing initiatives and regulations, in connection with Dubai’s reputation and diverse portfolio, only prove that the emirate’s economy is sustainable, resilient and adaptable.