|16 January, 2019

Updated: EY takes four floors of Dubai's 53-floor ICD Brookfield Place

Building set to complete in third quarter of this year has 25 percent of space either pre-let or under offer

Image used for illustrative purpose. Skyscrapers along Sheikh Zayed Road at dusk.

Image used for illustrative purpose. Skyscrapers along Sheikh Zayed Road at dusk.

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(An update including the spokesperson's statement of the amount of space under negotiation was added to the sixth paragraph).

Accountancy firm EY is to lease four floors of a new $1 billion tower project set for completion in the heart of Dubai’s financial district later this year.

In a press release issued on Tuesday, ICD Brookfield - the joint venture between the Investment Corporation of Dubai and Brookfield Asset Management - said that EY had taken four of the 53 storeys available in ICD Brookfield Place, equating to around 12 percent of the 990,000 square feet (sq ft) of office space available in the building, which is located in the Dubai International Financial Centre (DIFC).

Once the building completes, which is currently expected to be in the third quarter of 2019 following its topping out earlier this month, it will also house around 140,000 sq ft of retail space.

Khalid Al Bakhit, chairman of ICD Brookfield, said in the statement that it was "delighted that ICD Brookfield Place has attracted such a large pre-lease commitment".

“With efficient and flexible workspace alongside a fantastic selection of casual and fine dining, curated retail experiences and amenities, ICD Brookfield Place is an attractive address for an array of companies,” he said.

However, pre-lets for the building in the three years since ground breaking took place have been slow during what has been a difficult period for Dubai's commercial property market, and a spokesperson for ICD Brookfield confirmed to Zawya by email that so far only 25 percent of the space available in the building has either been pre-let or is under offer. The spokesperson said in an additional statement that 50 percent of the remaining space is currently under negotiation.

A report published earlier this month by Dubai-based property consultancy Asteco highlighted that rents within the DIFC declined by 12 percent last year, to 215 United Arab Emirates dirhams ($58.54) per sq ft. It also predicted that around 3.6 million sq ft of office space is due to complete in the city this year - more than double the 1.5 million sq ft completed in 2018.

In a press release accompanying the report, Asteco's managing director John Stevens said that while a "downward trajectory in the real estate market for the short-term is unavoidable due to tepid economic/market conditions and the expected supply glut, the outlook for the medium- and long-term for the UAE is encouraging, fuelled by a pro-active government response and clear focus on economic progress and sustainability’.

(Reporting by Michael Fahy; Editing by Shane McGinley)

(michael.fahy@refinitiv.com)

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© ZAWYA 2019