A couple of months ago we did a write up on Emirates REIT with a focus on their fee structure. Whilst the summer months are notoriously slow for new business activity, we thought to evaluate how they’ve done with regards to attracting new business formations to Index Tower.
The following new company formations have taken out leases at Index Tower.
The shaded areas show quarterly segments, and the highlighted blue addresses indicate where multiple tenants have registered to the same address.
From Q2 2016 to date we’ve seen around 22 new tenants take up space at Index Tower. Most of the leases appear to be on Level 5, which is where the smaller fitted out offices are. These offices have asking prices in the 400-450 AED psqft range, much higher than core and shell floors. Although it’s nice to see Emirates REIT taking on higher margin tenants, a lot of these offices are between 500 and 1,500 sqft which implies it will take a while to fill up the remaining floors with this approach.
We find these multi-tenant office registrations interesting as it appears several of these companies are Special Purpose Companies, i.e. likely established to hold assets or partake in a specific financial transaction. This implies they’re not big employers in terms of numbers of staff and hence offer minimal growth prospects.
Below is a chart of new business formation registered to Index Tower offices. Note that the data set doesn’t reflect existing DIFC registered companies that re-locate to Index Tower. That’s something we should probably work on including.