Dubai

Space Measurement Standard

RICS*

Space Unit of Measure

Square Feet

Financial Data Below Reported In

USD

Notes:

*RICS is emerging in the region however, at present, there is no set common practice and each landlord/authority uses their preferred method

**The industry is trying to move to SM but SF is still the dominant measure
5%-10%*
Typical Loss Factor from Rentable to Useable Square Feet

Loss Factor Notes:

*This is normally due to columns and also some landlords charging for common areas within the leaseable area

Landlord Concessions

Fit-Out Concession

The Landlord typically does not provide a contribution or concession to fit-out as a part of the lease transaction.

Fit-Out Cost Notes:

Fit-out contributions are not standard in the market. Some landlords will do some fit-out works for a tenant but these costs would then be added to the rent over the lease term.

Rent-Free Period

In addition to the fit-out contribution, the Landlord typically provides a contribution or concession in the form of a rent-free period.

Standard Range of Rent-Free Months

1mo.-6mo.

Typical number of rent-free months.

Rent-Free Period Notes:

Rent-free periods are market practice. One month per year of lease term is standard, however dependent on brand.

Lease Provisions

Lease Term

1yrs.-5yrs.

Typical lease term in years.

Operating Expenses & Service Charges Included

Quoted market rent typically does not include operating expenses (service charges). There are additional charges that apply to leasing space.

Additional Charges

$5/sf-$9/sf

Estimated range for all additional charges per Square Feet.

Additional Charges:

Utilities
Service Charges
Stamp Duty
Electric
Rates
HST
Cleaning
Hydro
Registration Fees
Taxes
Insurance
VAT
Other

Service Charge Notes:

There is a mix in the market and will differ from building to building. For onshore properties, we note a large number of rents that include service charges. For offshore (Free Zone) areas, the service charges tend to be charged separate to the rent.

Lease Timeline: The following apply to both office and industrial leases.

Lease Execution Requirements:

Typical upfront requirements
None for strong credit tenants
Upfront rental payment
Security deposit
Corporate guarantee
Not Applicable

Negotiated Subletting/Assignment

The tenant's right to sublease or assign the space typically is NOT negotiated in the lease agreement.
Landlord Consent: Typically, the landlord's written consent IS still required.

Negotiated Subletting/Assignment Notes:

Only assign to affinity or affiliations and not to third parties

Statutory Subletting/Assignment

This is NOT a statutory right.

Blend & Extend Strategies

Typically, a tenant can not take advantage of "blend & extend" ("forward renewal", "early renewal", etc.) strategies when the appropriate market conditions exist.

Statutory Early Termination

This is NOT a statutory termination right.

Negotiated Early Termination

It IS typical for tenants to be able to negotiate an early termination right in the lease agreement.

Early Termination Notes:

Some of the older landlords will still only sign 1 year leases and they will not include cancellation clauses. Most of the longer term leases will make a provision for cancellation.

Typical cost: 1-3 months rent penalty

Obligations Upon Lease Expiration

Basic broom clean condition and removal of special installations.
Dilapidations.
Complete restoration to shell.
Other

Tenant Obligation Notes:

Unless otherwise agreed by the landlord, which is quite common

Workplace

Regional Office Space

80sf-110sf

Typical Square Feet per employee (includes office square footage for employees and contractors).

Regional HQ Office Space

100sf-150sf

Typical Square Feet per employee (includes office square footage for employees and contractors).

Dubai market is behind.

Beginning to see the emergence with multi-national companies

Desk Sharing

Desk-sharing is not a common practice in the market.

Urbanization of the workforce is: A major factor driving location decisions

This is a natural factor considering the layout and configuration of Dubai and Abu Dhabi

Landlord Concessions

Fit-Out Concession

The Landlord typically does not provide a contribution or concession to fit-out as a part of the lease transaction.

Rent-Free Period

In addition to the fit-out contribution, the Landlord typically provides a contribution or concession in the form of a rent-free period.

Standard Range of Rent-Free Months

1mo.-6mo.

Typical number of rent-free months.

Rent-Free Notes:

Dependent on lease terms, but typically a 1 or 2 month rent-free fit-out period.

Low figure: relevant for Light Industrial Units
High figure: large supply of large industrial space and long-lease terms

Lease Provisions

Lease Term

3yrs.-10yrs.

Typical lease term in years.

Operating Expenses & Service Charges Included

Quoted market rent typically does not include operating expenses (service charges). There are additional charges that apply to leasing space.

Additional Charges

$4/sf-$8/sf

Estimated range in total for all additional charges per Square Feet.

Additional Charges:

Utilities
Service Charges
Stamp Duty
Electric
Rates
HST
Cleaning
Hydro
Registration Fees
Taxes
Insurance
VAT
Other

Service Charge Notes:

Although a large number of landlords include all charges in the rent, we noticed that more of the new developments will have additional service charges added to the rent.

Lease Timeline: The following apply to both office and industrial leases.

Lease Execution Requirements:

Typical upfront requirements
None for strong credit tenants
Upfront rental payment
Security deposit
Corporate guarantee
Not Applicable

Negotiated Subletting/Assignment

The tenant's right to sublease or assign the space typically is NOT negotiated in the lease agreement.
Landlord Consent: Typically, the landlord's written consent IS still required.

Negotiated Subletting/Assignment Notes:

Only assign to affinity or affiliations and not to third parties

Statutory Subletting/Assignment

This is NOT a statutory right.

Blend & Extend Strategies

Typically, a tenant can not take advantage of "blend & extend" ("forward renewal", "early renewal", etc.) strategies when the appropriate market conditions exist.

Statutory Early Termination

This is NOT a statutory termination right.

Negotiated Early Termination

It IS typical for tenants to be able to negotiate an early termination right in the lease agreement.

Early Termination Notes:

Some of the older landlords will still only sign 1 year leases and they will not include cancellation clauses. Most of the longer term leases will make a provision for cancellation.

Typical cost: 1-3 months rent penalty

Obligations Upon Lease Expiration

Basic broom clean condition and removal of special installations.
Dilapidations.
Complete restoration to shell.
Other

Tenant Obligation Notes:

Unless otherwise agreed by the landlord, which is quite common

Section 1. Fit Cost Data

Total Fit-Out Cost

$153.81/sf

Class A Office

$125.72/sf

Class B Office

$84.78/sf

Class C Office

$68.33/sf

Flex Office / Warehouse

Furniture Cost

$32.71/sf

Class A Office

$27.29/sf

Class B Office

$16.35/sf

Class C Office

Furniture Cost Notes:

Furniture costs are paid by the Client

Floor Covering Cost

$10.84/sf

Class A Office

$8.23/sf

Class B Office

$1.3/sf

Warehouse

Floor Covering Cost Notes:

Floor Covering costs are typically paid by the Client

Partitioning Walls Cost

$6.82/sf

Class A Office

$4.92/sf

Class B Office

$4.92/sf-$/sf

Class C Office

$4.92/sf

Warehouse

Partitioning Walls Cost Notes:

Partitioning Walls costs are typically paid by the Client

Other (IT/etc) Cost

$13.65/sf

Class A Office

$10.94/sf

Class B Office

$8.23/sf

Class C Office

Other Cost Notes:

Other costs include IT, which is typically paid by the Client

Typical Manpower Hourly Rates

$109/hr

Project Assistant

$218/hr

Workplace Consultant

Project Management Base Fee

3%

Base fee [%] for the fitout of above office of 1000 m2.

Section 2. Scope of Work Description

Phase 1: Services Before and During the Transaction

Review the LOI and work letter portion of the Lease to ensure that the clients interests are protected during the build-out of the project.
Typically included in "Project Management" scope of work.
Advise Colliers broker and client on project issues and their resolution as they occur.
Typically included in "Project Management" scope of work.
Participate in building tours, if requested, to evaluate building systems and other cost-related observations and prepare a building due diligence report
Typically included in "Project Management" scope of work.
Develop high-level project estimate and timeline based on test fit and Client standards
Typically included in "Project Management" scope of work.
Schedule and chair Schematic Drawings and Design Development Drawings review meetings/conference calls
Typically included in "Project Management" scope of work.
Define workplace strategy for client, research what kind of location, office / work environment accelerates business
Typically included in "Project Management" scope of work.
Define program of requirements for location, building and interior characteristics
Typically included in "Project Management" scope of work.
Engage with the Client Facilities Management (FM) Operations team to ensure alignment with Client standards
Typically included in "Project Management" scope of work.

Phase 2: Service Before and During the Design Process

Develop preliminary project budget and schedule.
Typically included in "Project Management" scope of work.
Develop the RFP for selection of a space planner/architect and any other consultants identified and required
Typically included in "Project Management" scope of work.
Analyze, compare and evaluate responses to the RFP.
Typically included in "Project Management" scope of work.
Orchestrate the space planner/architect interview process.
Typically included in "Project Management" scope of work.
Negotiate, on behalf of the client, professional services agreements with the space planner/architect and other consultants.
Typically included in "Project Management" scope of work.
Review architect’s final Program of Requirements.
Typically included in "Project Management" scope of work.
Monitor the design team’s schedule of deadlines and deliverables. Coordinate meetings with the design team and the client. Manage the design process on behalf of the client.
Typically included in "Project Management" scope of work.
Review and recommend payment of the invoices for services. Submit invoices for payment to landlord or client and prepare monthly reports of project costs versus project budget.
Typically included in "Project Management" scope of work.
Negotiate all client-vendor contractors (IT, AV, Security/Access Control, Signage, High Density Filing) on behalf of client.
Typically included in "Project Management" scope of work.
Coordinate with either Architect or General Contractor in permitting process
Typically included in "Project Management" scope of work.
Schedule and chair weekly design review meetings/conference calls
Typically included in "Project Management" scope of work.
Other Value-Add Services: Test fits (including Look & Feel) - Cost Estimates - Schedule/timing/phasing scenarios - Floor plan, core and circulation efficiency ratios(GIA vs NIA) (NOA vs NIA) - Technical due diligence/Assessments - We may pack everything into a Feasibility Study or proposed them separately depending on the situation.
Typically included in "Project Management" scope of work.
Define interior guidelines for architect based on workplace strategy
Typically included in "Project Management" scope of work.
Control workplace strategy and functionality and during design process
Typically included in "Project Management" scope of work.
Architectural design
Typically included in “Design/Build” scope of work.

Phase 3: Services Before Construction

Liaise with the Landlord’s Representative.
Typically included in "Project Management" scope of work.
Prequalify a list of general contractors to be interviewed (consult lease to confirm any Landlord required GCs).
Typically included in "Project Management" scope of work.
Develop the RFP, including Landlord and/or Lease required documents, for selection of a general contractor.
Typically included in "Project Management" scope of work.
Analyze, level, and evaluate the responses to RFP.
Typically included in "Project Management" scope of work.
Orchestrate general contractor interview process and prepare evaluation scorecard.
Typically included in "Project Management" scope of work.
Review all proposed subcontractors and monitor the general contractor’s subcontractor bid process to ensure integrity of the process and quality of the workmanship.
Typically included in "Project Management" scope of work.
Monitor the general contractor’s schedule of deadlines and deliverables. Coordinate meetings between the design team, general contractor, client and appropriate vendors.
Typically included in "Project Management" scope of work.
Negotiate, on client's behalf, the General Contractor agreement for Client approval
Typically included in "Project Management" scope of work.
Schedule and coordinate Architect's 90% Construction Drawings review
Typically included in "Project Management" scope of work.
Develop Project Cost Summary + Invoice Tracker and update weekly
Typically included in "Project Management" scope of work.

Phase 4: Services During Construction

Coordinate with the Landlord’s Representative.
Typically included in "Project Management" scope of work.
Conduct weekly construction meetings to assess progress, quality and conformance with the Contract Documents and distribute minutes of meetings.
Typically included in "Project Management" scope of work.
Monitor the general contractor’s schedule.
Typically included in "Project Management" scope of work.
Monitor the construction budget.
Typically included in "Project Management" scope of work.
Review, and recommend for payment, the contractor’s Applications for Payment.
Typically included in "Project Management" scope of work.
Monitor all project documentation.
Typically included in "Project Management" scope of work.
Act at all times as client’s liaison to vendors contracted directly by Client (IT, AV, Security/Access Control, Signage).
Typically included in "Project Management" scope of work.
Oversee the punch list process to ensure acceptable completion of all items.
Typically included in "Project Management" scope of work.
Close out all consultant, contractor and vendor contracts.
Typically included in "Project Management" scope of work.
Submit General Contractor, vendor, and consultant invoices to Landlord for reimbursement per the Lease Workletter
Typically included in "Project Management" scope of work.
Review and recommend for payment all General Contractor, vendor, and consultant invoices; submit to Client for approval
Typically included in "Project Management" scope of work.
Deliver close-out documents, as specified in the Lease, to Client
Typically included in "Project Management" scope of work.
Coordinate value/engineering process, if required.
Typically included in "Project Management" scope of work.
Provide as-built drawings and O&M Manuals to Client FM Operations team
Typically included in "Project Management" scope of work.

Additional Services: Services During Relocation

Develop RFP for moving companies, evaluate responses and recommend selection of moving company or identify, interview and review proposal for services from relocation consultants.
Typically included in "Project Management" scope of work.
Represent Client in development of move strategy.
Typically included in "Project Management" scope of work.
Monitor development of move activity checklist.
Typically included in "Project Management" scope of work.
Represent client on site during move process.
Typically included in "Project Management" scope of work.

Additional Services: Project Management Services Related to Furniture/Workstation Procurement

Conduct bid process for all furniture (workstations, case goods, seating, filing) purchases specified by the architect and/or client.
Typically included in "Project Management" scope of work.
Conduct bid process for refurbishment of existing furniture and/or workstations.
Typically included in "Project Management" scope of work.
Evaluate bids and negotiate purchase order with manufacturer(s).
Typically included in "Project Management" scope of work.
Negotiate national buying contract with select furniture dealerships, using Colliers International purchasing power
Typically included in "Project Management" scope of work.
Change management before, during and after moving to the new work environment
Typically included in "Project Management" scope of work.
Measuring/monitoring (KPI's) how the way of working and building accelerates business and goals of the client
Typically included in "Project Management" scope of work.

Business Climate Business Climate data provided in partnership with Hickey & Associates. Rankings reported on a scale of 1 (least favorable) to 10 (most favorable). Please refer to the full report Explore 2017 for additional details.

Incentives and Labor Market

1, 9 1/10

Incentives
Value potential, diversity/number of programs

4, 6 4/10

Job Saturation
Competition for workers

5, 5 5/10

Wage Inflation
Rise in wages (past 10 years, local currency)

Educational Attainment

5, 5 5/10

HS Ed Eq
Proportion of population attaining this level

2, 8 2/10

University Ed
Proportion of population attaining this level

4, 6 4/10

Overall
Composite average of HS Ed Eq & University

Composite

4, 6 4/10

Additive sum of incentives, saturation, overall ed attainment, and wage inflation

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