The boom in office space supply in Dubai between 2012 and 2014 has met the needs of corporate occupiers, but the city may need to reconsider its approach to urban design if it wants to attract more of the small, creative global tech companies that are re-colonising so many north American and European cities.
2014 saw a year-on-year increase in available office space in Dubai of 13 per cent, but this was mainly in purpose-built business park-style accommodation. With supply overtaking demand, rents and take-up have now dropped: in Dubai’s finance sector, the latter fell by 6.7 per cent in the first six months of 2015, with rents down as much as 60 per cent on 2008 levels, when new entrants to the market were fighting for space.
Our 12 Cities report suggests that Dubai now needs to alter its zonal development strategy in order to attract more global tech occupiers, who are seeking accommodation in the distinctive, creative, urban environments that have fared well in cities such as London and New York. Pedestrian-friendly environments, which facilitate human interaction and serendipitous meetings between people with different skills and capabilities, are one of the key features of tech neighbourhoods, and therefore need to be included in the urban planning process.
Citywalk, a new low-rise mixed-use development arranged around a traditional street layout, is an early successful example of a more tech-friendly development in the city. We suggest that others follow its lead by adopting a completely new development mindset, closely examining the interaction of new buildings with their streetscape, while being conscious of the unique challenges posed by Dubai’s climate, to appeal to tech occupiers.
With its access to Venture Capital, excellent links to other key global cities and city living offer, Dubai has the potential to become a leading tech destination within the region if it can give tech companies the type of spaces in which they tend to thrive.