Chinese & Indian Firms See Dubai As Best Regional Business Location

3 Oct, 2010, Dubai

Indian and Chinese businesses see Dubai as the leading business centre in the region, but negative perceptions regarding occupancy costs still remain according to a new report, ‘Retreading The Silk Road ’, published today by Cushman & Wakefield Middle East (C&W), part of the world’s largest privately held commercial real estate services firm.

Based on feedback from the firm’s agency division which suggested that commercial leasing by companies from South Asia and Asia Pacific has been on the rise, C&W conducted a series of interviews with Chinese and Indian companies already established in Dubai as well as with those companies considering setting up in the region. The companies interviewed cover a range of sectors – Financial Services, Professional Services, IT, Leisure and Tourism, Industrials and Manufacturing.

Across the board, Chinese & Indian companies believe that Dubai offers the best business environment as a result of its location, as well as its superior infrastructure and transport links in comparison with its regional peers. However, there remains a perception in the market that Dubai is as expensive and overcrowded as it was in the boom years of 2006-2008.

Dubai based companies

Superior quality of space – Respondents believe that Dubai offers suitable space, in terms of both quality and size, for a range of businesses at competitive rental values in comparison with neighbouring business centres within the region.
Satellite Offices - Despite being part of much larger organisations, the majority of businesses are currently operating small satellite offices, with limited space requirements and minimal headcount.
Business Uncertainty - Most companies express significant uncertainty regarding the business environment, with no plans or visibility beyond 3 years.

Businesses considering opening an office in the region

Dubai remains most attractive despite downturn - Those companies with plans to expand in the region do envisage establishing a Dubai office within the next 3 years.
Office Requirements - most companies surveyed will initially seek either serviced office space or a business park location, within a building less than 5 years old, close to the CBD.

The report, released to mark the start of Cityscape Global, also provides key advice for Dubai based landlords, existing and potential occupiers, and Dubai as a whole, as well as anticipated trends for the coming years.

Commenting on the report, Michael Atwell, Head of C&W’s Middle East Operations, said:

“Indian and Chinese companies are quite clearly looking at Dubai as the ideal strategic location for their regional business activities. However, it is vital that the city’s landlords offer the flexibility and support that these new entrants, who are taking a cautious approach to regional expansion, require. Although rents in areas like DIFC remain relatively high, Dubai now offers improved affordability for those looking to set up operations and the city must work harder to challenge any misconception.

We expect the number of enquiries from China over the short term to remain relatively constant as companies focus on both home and neighbouring Asian markets. However, over the longer term we see this as a very strong growth market for Dubai.”

C&W’s teams in China and India contributed to the research for this report and Kausuv Roy, Executive Director Cushman & Wakefield India, added:

“When Indian companies talk to us about setting up an office in the Gulf, Dubai is naturally uppermost in their minds because it meets their needs, offering a friendly business environment, a large expatriate population and historic trade links with South Asia. We therefore anticipate an increased number of enquiries for office space to come out of India in the coming period.”

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