ONE of Dubai’s largest office landlords is planning to expand its portfolio as the Middle East’s business hub continues to defy a global slump in commercial real estate.

Tecom Group, whose tenants include Meta Platforms and Alphabet, is considering new developments as well as acquisitions to boost its portfolio, chief executive officer Abdulla Belhoul told reporters, without disclosing details of how much the firm’s looking to invest. The company, which reported a 49 per cent increase in annual profit, is also planning to buy more land, he said.

An influx of businesses setting up in Dubai has boosted the city’s commercial real estate market and helped end a multi-year property slump. City-wide office occupancy rates are at an all-time high of 89 per cent, according to real estate consultancy Cushman & Wakefield Core, stoking concerns of tight supply down the line.

That’s a stark contrast to major cities around the world where office landlords are being squeezed by a combination of higher borrowing costs and lower occupancy, as many companies continue to allow employees to work from home – at least part of the time.

For instance, Brookfield’s tower in the heart of Dubai’s financial district has been one of their best performing assets globally at a time when other properties – including in Los Angeles and London’s Canary Wharf – have been hit by falling occupancy.

Occupancy across Tecom’s commercial and industrial properties rose to 89 per cent in 2023 from 86 per cent a year earlier. The firm, which operates several business districts in Dubai, reported a 15 per cent increase in new tenants including drugmaker AstraZeneca.

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Tecom’s revenue and net profit are “two-and-a-half to three years” ahead of what was initially envisioned when it went public in 2022, Belhoul said. “This has put us in a great position to explore all types of expansion modes.” BLOOMBERG