Offices and retail in Business Bay

Two prices in one district

What surprises people looking at Business Bay for the first time is that the district runs two price lists that never meet. Grade A towers on the canal, sold off-plan today, trade around 4,900 AED per square foot. Towers delivered in the early 2000s, within the same five hundred metres, sit at less than half that.

It is not an anomaly to exploit, it is the difference between two products. New build brings deep open floorplates, generous clear heights and current building services, the things that decide which company can move in. Completed stock brings entry at half the price, the chance to inspect before signing and, if already let, rent from month one.

The yield in the table is calculated on completed stock for exactly that reason: it is the only stock comparable with a rent collected today.

Who leases here, and what they want

Demand in Business Bay comes from professional services, consultancies, trading companies and practices. These are tenants looking for small to mid floorplates, between 500 and 1,500 square feet, and they weigh two things above all: allocated parking and how easily they reach it from Sheikh Zayed Road.

For a buyer that means the right unit is not the cheapest per square foot, it is the one a company can occupy without works. A floor with no columns in the middle, with cooling reaching where it is needed and parking included, lets in weeks. The same floor without those things sits empty for months, and the void costs more than the discount paid to get it.

Business Bay retail is another trade

Retail units here carry higher rent per square foot than offices but a lower yield, because sale prices climb faster than rents. That is the signal that retail in Business Bay is bought for position, not for the entry yield.

The difference between a unit at the tower entrance and one at the end of a corridor does not show on a floorplan and is never recovered through price. Anyone looking at Business Bay retail should be counting the people walking past, not the square feet.