Demand for premium workspaces driving office fit-out activity in the Gulf
A new report by Turner & Townsend shows that the Middle East office fit-out market remains surprisingly strong despite ongoing geopolitical uncertainty, supported by robust demand for premium office space.
The firm’s annual ‘Global Office Fit-Out Cost Guide’ sheds light on fit-out cost trends across 58 global office markets, including regional hubs Dubai, Abu Dhabi and Riyadh.
Fit-out refers to the cost of turning an empty office into a usable workspace through investment in interior design, office infrastructure and furniture, among other elements.
At a global level, the report found that average fit-out prices have increased across the board, with Munich (+19.6%), São Paulo (+19.0%) and Bangalore (+11.6%) recording the steepest rises. In terms of cost per square metre, however, London and New York remain the world’s most expensive cities for office fit-outs – both financial capitals have consistently topped Turner & Townsend’s rankings in recent years.
Prior to recent geopolitical tensions, average high-specification office fit-out costs stood at approximately AED 13,946 per square metre across Dubai and Abu Dhabi, compared with around SAR 14,932 per square metre in Saudi Arabia. By comparison, a fit-out in New York costs an average of $5,885 per square metre, roughly 1.5 times higher.
One factor driving higher fit-out costs in the region is strong demand for premium office space, driven by a growing number of multinational companies establishing and expanding operations in the Middle East.
This sits alongside broader global trends, where rising demand for high-quality, highly amenitised Grade A office space, combined with a shortage of supply, has pushed up fit-out costs across many of the cities assessed.
Another key driver is the changing nature of the workplace. As flexible working has become entrenched and offices have evolved from daily attendance spaces into collaboration hubs, businesses are increasingly investing in higher-quality, sustainable workspaces designed to bring people together, support collaboration and enhance the employee experience.
Turner & Townsend’s report noted that high-profile developments such as the Dubai International Financial Centre, Abu Dhabi Global Market and the King Abdullah Financial District are “setting new benchmarks for workplace quality and experience”, not only regionally but also globally.
“Even in somewhat uncertain conditions, occupiers continue to prioritise quality, with fit-outs focused on flexibility and long-term resilience,” said Nadim Farah, Director at Turner & Townsend.
On the region’s outlook, John Grant, Head of Occupier & Portfolios at Turner & Townsend, said: “While current geopolitical events cannot be ignored, the long-term outlook for the Middle East remains highly attractive. In the interim, we have seen more cautious cost reassessments; however, disruption to decision-making and supply chains has remained limited and is widely viewed as temporary.”
“The region has a strong track record of absorbing shocks and rebounding, with the broader outlook for commercial real estate remaining positive.”
