Monday, December 13, 2010

DIFC's new rental structure to offer 50% discount in 2011

Dubai International Financial Centre (DIFC) will introduce its new rental pricing structure in January 2011, offering at least 50 percent discounts for few tenants, the officials here revealed.

The tax-free business hub, also home to 780 businesses, including global financial service firms, will introduce new fee structure to increase transparency.

The Deputy Chief Executive and Head of Business Development, Marwan Ahmad Lufti, said that even earlier there were no standard rates across the entire DIFC.

Few clients will even receive discount of more than 50percent, said Lufti.

The DIFC rental prices per square foot will vary, depending on long-term leases signed by officials, ahead of centre's opening in 2004.

According to new structure, the most expensive DIFC-owned property will cost about $76 per square foot. The real estate consultancy, Jones Lang LaSalle (JLL), in their September report said that vacancy rates in Dubai’s financial district, including DIFC and Burj Khalifa, as defined by JLL, will grow from 12percent to a peak of 30 to 40 percent in the next 12 to 18 months. According to JLL, the rate was likely to go back to 10 to 15 percent levels by 2014.

However, the DIFC officials clarified that the office occupancy rate is 95percent in DIFC-owned buildings. The non-DIFC owned buildings constitute only 35percent of leasable office space in DIFC.

The tenants get to choose between new contracts from January or wait for their existing leases to expire. This will permit clients to plan for their long-term growth. Several clients have held back their decisions due to uncertainty over pricing and operational costs. This will remove the uncertainty, said Ahmad Lufti.

1 comment:

Philippines real estate said...

Another good news for tenants. Because of the introduction of new fee structure, the transparency increased and the DIFC offered discount to few tenants.