Omar Kassim

I recently got access to Emaar’s upcoming and almost complete commercial development, Burj Dubai Square located adjacent to the Burj Dubai. The development consists of six buildings of with about 13.8 million sq feet of leaseable commercial and retail space. The timing of the development is impeccable due to the current demand for commercial space.

Emaar has leased 80% of the space to a variety of clients, including ING Private Bank and HSBC, who are rumoured to have leased the whole of building four. The remaining 20% was initally sold via private release and then released to public on the 15th of March. The property was sold at 2500 AED per sq ft. If we compare this to other commercial properties both in the area (Business Bay) and those 20 minutes or so away, it looks very pricey. The Executive Towers were intially sold at 1200 AED per sq ft, while various property in Nakheel’s Jumeriah Lake Towers were sold in the 600 AED per sq ft range. Aside from the Burj Dubai (3500 AED per sq ft), this property is possibly the most expensive that has hit the market to date, surpassing various buildings in Dubai International Financial Center which hit a top end of 2200 AED per sq ft.

However, I think the property is a great buy! Here’s why:

1. The lack of availability of commercial space within the city. Forget Sheikh Zayed Road, it is very difficult to find commercial space anywhere in the city. A number of agents said to me that they were not really expecting anything significant to hit the market until the end of this year.

2. Rentals on Sheikh Zayed Road are crossing 250 AED per sq ft. Recently, I was quoted 350 AED per sq ft for space in Al Attar Business Tower. The almost completed Park Place started leasing at 290 AED per sq ft and is rumoured to have hit 370 AED per sq ft on the last few remaining units.

3. Burj Dubai Square is expected to be completed in the the next three to four months. Fit-outs are expected to start in July, with the property being handed over for use by October. The key factor is that the property is hitting the market at a time of extremely high demand, the timing is very good.

4. 250 AED per sq ft is equivalent to a 10% rental yield, with further upside expected in the short term.

5. Long term propspects look bright. With close proximity to Burj Dubai, Dubai International Financial Center and the metro station, the property should turn into prime commercial real estate.

Disclaimer: I think the property is definetly an interesting proposition, however, the above analysis does not constitute advice to buy or rent space in the property.