RIYADH: As demand for quality office space continues to grow in the Middle East region, the UAE’s two major business hubs – Dubai and Abu Dhabi – are expected to witness rental rates moving northwards amid the occupiers’ push for “flight to quality”, according to global real estate consultancy Knight Frank.
While overall office rents have been resilient in Dubai and Abu Dhabi, the demand for Grade A office space is continuing to rise amid strong occupancy levels as new supply remains limited, analysis from the firm suggests.
Dubai alone had a requirement of 265,000 square feet of new office space during the third quarter of this year, with the Knight Frank data showing that the city has seen 739,000 sq. ft of new office demand so far this year.
With this trend continuing, the property consultant expects Dubai to surpass the 1.1 million sq. ft of requirements it registered in 2021.
Faisal Durrani, partner – head of Middle East Research at Knight Frank, pointed out that the biggest challenge for the market is a shortage of prime Grade A space.
“With just 2.9 million square feet due to complete between now and 2025 and with Grade A occupancy levels hovering at around 90 percent on average – even higher for some of the most sought-after buildings – occupiers entering the market or looking to expand are faced with a very limited number of options,” he said.
Knight Frank’s research found out that business services tenants are responsible for the bulk of Dubai’s new office new demand, together accounting for 97,000 sq. ft of space requirements during the third quarter. The top demand drivers are Barsha Heights (31,000 sq. ft), Business Bay (27,000 sq. ft), JLT (28,000 sq. ft) and Sheikh Zayed Road (22,000 sq. ft).
“There is a distinct trend of a flight to quality that has bedded in, with occupiers migrating away from older buildings into more modern builds that are well managed and maintained and many international businesses are looking for space with ESG credentials,” said Andrew Love, partner – head of Occupier-Landlord Strategy and Solutions and head of Middle East Capital Markets at Knight Frank.
Despite rising demand, Knight Frank said the volume of new supply remains limited, with around 2.9 million sq. ft to be delivered by the end of 2025. This would include District 2020 and Uptown Tower T2 accounting for the bulk of new space.
It noted that the severity of the shortage of new office space, combined with rising demand, particularly for high-quality offices, suggests that office rents will continue to experience upward pressure in Dubai.
In Abu Dhabi, Knight Frank research showed that Capital Centre has outpaced the rest of the city, with average rents climbing by 4.9 percent over the course of the last 12 months, taking them to 1,400 dirhams ($381) per sq.m.
This comes when Saudi Arabia’s capital city Riyadh is also seeing an increasing demand for prime office space as its Grade A office occupancy levels rose by 4 percent year-on-year to reach 98 percent.
This would translate into office lease rates continuing to climb in the wake of growing demand.
The average lease rates for prime office space in Riyadh have increased by 18 percent over the past 12 months to SR1,775 ($472) per sq. m, according to Knight Frank.
Meanwhile, Jeddah’s office market is also experiencing a “resurgence” in requirements as multinational and domestic businesses ramp up their presence in Saudi Arabia’s second-largest city.
BENGALURU: Gold started the new year on a solid note after ending a volatile 2022 largely unchanged, with prices rallying to a more than six-month peak on Tuesday as investors positioned for the Federal Reserve’s latest policy minutes.
Spot gold rose 0.8 percent to $1,838.54 per ounce by 1000 GMT, having hit a high since June 17 last year. US gold futures gained 1 percent to $1,844.70.
Benchmark US 10-year Treasury yields fell to their session lows, reducing the opportunity cost of holding gold, which does not pay any interest.
“Alternatively, the new year is supporting new inflows into all asset classes,” said UBS analyst Giovanni Staunovo.
However, “we continue to see rising US interest rates and lower US inflation as a headwind for gold, but look for higherprices later in the year, when the Fed rate hikes are expected to end,” Staunovo said.
The market focus now turns to the minutes from the Fed’s December policy meeting due on Wednesday and other economic data expected this week.
While gold is seen as a hedge against economic uncertainty, it tends to loose its appeal in a higher interest rate environment.
Bullion posted a yearly loss in 2022, albeit a small one, as hawkish Fed policies fueled a dollar rally that challenged the precious metal’s role as a safe haven.
“The de-dollarization seen by several central banks last year, when a record amount of gold was bought look set to continue, thereby providing a soft floor under the market,” according to a Saxo Bank note.
On a technical front, above $1,842, the 50 percent of the 2022 correction, gold will be looking for resistance at $1,850 and $1,878 next, the note said.
Elsewhere, spot silver rose 1.6 percent to $24.37 per ounce, platinum scaled 1.4 percent to $1,083.98, and palladium advanced 0.6 percent to $1,805.01.
TUNIS: The Tunisian government on Tuesday presented a three-year development plan that relies heavily on private sector investment, particularly in industry, and boosting phosphate production.
The cash-strapped North African country is battling 10 percent inflation alongside slow growth, high unemployment and shortages of basic goods, exacerbated by the COVID-19 pandemic and the war in Ukraine.
The 2023-2025 plan “puts forward a new model of development” to reset Tunisia’s economy and battle poverty, which currently affects around a fifth of the 12 million population, Economy Minister Samir Saied said.
Tunisian authorities are hoping to secure a nearly $2-billion bailout from the International Monetary Fund they hope will unlock other sources of international financing.
Saied said the plan unveiled Tuesday, which is based on growth of 2.1 percent this year — compared to 1.8 percent last year — was “realistic and prudent.”
He predicted a fall in unemployment of just one percentage point to 14 percent between 2022 and 2025.
Saied said private sector investment should be the “engine of growth,” calling for improvements to Tunisia’s closed business climate.
He laid out plans for $12.3 billion in public investments over the three years, two-thirds via the state budget and the remainder through publicly owned companies.
Industry Minister Neila Gonji, who presented part of the plan, said increased investment in industry could see the sector grow from 15 to 18 percent of gross domestic product by 2025, with exports growing by a third to $18 billion a year.
The plan also seeks to boost production of phosphates, one of Tunisia’s rare natural resources, from 3.7 million tons last year to 12 million tons in 2025.
The government also plans to allow farming land to be used for solar and wind energy generation, as well as allowing small-scale solar projects in a market that is currently dominated by state-owned firm STEG.
The plan lays out a program of improvements to the social security system, with payouts for families looking after elderly non-relatives, and investments in education for school dropouts.
RIYADH: Saudi Arabia’s Zakat, Tax and Customs Authority is organizing a conference on Feb.8-9 in Riyadh to discuss the latest global taxation trends.
Top Saudi officials, heads of international tax authorities, and local, regional, and global experts will take part in the two-day event to be held under the theme “An Integrated Digital Ecosystem for Sustainable Economy and Improved Security.”
The conference will discuss key global and local experiences in the tax, zakat, and customs sector. Registration for the first Zakat, Tax, and Customs Conference has started online.
Registration will be allowed for members of the business sector, including taxpayers, importers, exporters, experts, and researchers from around the world. The event seeks to promote a joint line of action for the sector and discuss new visions and developments in the field.
RIYADH: Saudi Arabia’s benchmark index dialed up 82.60 points — or 0.78 percent — to close at 10,660.94 on Tuesday, as the monthly Purchasing Managers’ Index from Riyad Bank reported a sharp demand recovery and strongest job growth in almost five years.
Tadawul All Share Index’s total trading turnover also increased to SR3.88 billion ($1.03 billion) from Monday’s SR3.67 billion. The market saw 162 of the listed 223 firms rise, while 44 lagged.
“Saudi market witnessed gains for the third consecutive day resulting in a year-to-date gain of 1.7 percent in 2023 as it saw positive returns for the bulk of the sectors after the monthly PMI survey report,” Junaid Ansari, head of investment strategy and research at Kamco Invest, told Arab News.
The sectoral pulse on Tuesday also revved up gains, as 19 of the 21 indices were northbound. The topmost gainer was the Food & Staples Retailing Index, which advanced 112.15 points to close at 8,802.64.
Almost all large-cap stocks closed higher, with Saudi Arabian Mining Co. and ACWA Power Co. closing 1.34 percent and 1.4 percent up to SR68.10 and SR158.60, respectively.
Parallel market Nomu and MSCI Tadawul 30 Index also rose 0.64 percent and 0.76 percent to close at 19,559.56 and 1,484.37, respectively.
“The market sentiments were also positive thanks to the Hong Kong benchmark index gaining 1.8 percent on the first trading day of the year,” said Ansari.
The move assumes significance as the Hang Seng Index braved a weak manufacturing survey from China and the dismal infection figures. Also noteworthy to mention is the overall gains happened even as oil prices took a hit.
Brent crude futures fell $1.18 to $84.73 a barrel by 3.15 p.m. Riyadh time, while the US West Texas Intermediate crude slipped $1.10 to $79.16.
Stock markets in the Gulf Cooperation Council region on Jan. 3 clocked mixed performance as Abu Dhabi, Qatar and Muscat posted marginal gains while Dubai, Kuwait and Bahrain closed lower.
On the announcements front, Wafrah for Industry and Development Co. informed on Jan. 3 that it had signed a contract with Saudi Dairy and Foodstuff Co. for SR11.85 million.
In a statement to Tadawul, Wafrah said it would produce frozen french fries under SADAFCO’s trade name, and the six-month contract is likely to increase its revenues. The breakfast food company became the best performer of the day as it closed 7.93 percent to end at SR29.95.
On Tuesday, construction company Enma Al Rawabi Co. also announced that it signed an SR45.71 million contract with Saudi Mining Services Co. to lease a commercial building located on Takhassusi Street, Olaya District, Riyadh. The five-year contract will be effective as of May 15, 2023.
RIYADH: Ducab Group – one of the UAE’s largest industrial manufacturing businesses – is supplying 633 km of medium voltage and earthing cable to a new Egyptian 70-turbine wind farm, according to the Emirates News Agency, WAM.
The Gulf of Suez project, for Egypt’s New and Renewable Energy Authority, will play a key role in the country’s commitment to generate 42 percent of all electricity from renewable energy by 2035 and save around 600,000 tonnes of CO2 every year.
The project is one of the largest developed utility scale wind power plants in Egypt and will contribute 250 megawatts of renewable energy generation to the country’s energy mix from the 70 turbines being installed in an area of 57 sq. km..
For the project, Ducab has partnered with Vestas, EPC contractor and supplier of the 70 wind turbines.
Group CEO of Ducab, Mohammed Almutawa, said: “We are committed to supporting countries achieve their sustainability ambitions and our solutions are in high demand for solar and wind power projects around the world.
“Ducab already supplies solutions to landmark renewable energy infrastructure in 55 countries, but we are proud that demand for our expertise, experience and quality solutions is experiencing significant growth as more and more countries, such as Egypt, decarbonise and transition to renewables.”
In addition to the Gulf of Suez wind farm, Ducab has provided solutions for a wide range of milestone renewable energy projects in the Middle East, including the Mohammed bin Rashid Al Maktoum Solar Park, the Shams 1 project and the Al Barakah nuclear plant in the UAE.
The company has also initiated renewable energy projects across 55 countries and in April this year announced its first solar park partnership in Mexico.
As an Emirati brand, Ducab is aligned with ‘Operation 300bn’, the UAE’s national strategy to increase the industrial sector’s contribution to gross domestic product from $36.23 billion to $81.74 billion by 2031.