Dubai’s coolest location to work could yet be the place to live as well. And all that with a canal by its side.
The developer of Dubai Design District confirmed that a decision on the residential components will be taken once the infrastructure works at the 21 million square feet destination are done with, most likely by the middle of next year. “At the time, we will have a firm idea as to how much of the residential plots will be done by us and how many private developers get to do,” said Mohammad Saeed Al Shehhi, Chief Operating Officer of d3. “In fact, a substantial portion of the land within d3 is marked for residential.
“The intention right from the moment d3 was conceived was for it to be the place to live, work and play for the creative, fashion and design sectors.”
If comparisons were needed, that would mean d3’s look and feel would be the same as in the Miami Design District or New York’s Meatpacking District.
On the work side of things, d3 is doing quite well. Offices falling under Phase 1 of the development has notched up significant leasing activity. Al Shehhi lists the highlights — “We have done 85 per cent on the Phase 1 leasing, representing 320 offices and of which more than 130 are operational. So far, more than 4,500 professionals from the creative and allied industry are working from here.”
No impact
D3 sure is on a hot streak. All through the last 12 months, it has been rated as the best performing destination in Dubai on the leasing side. So much so, the continuing weak spell in the commercial rental space has had no impact on its prospects. According to David Godchaux, CEO of CORE, “D3 is a contrast to the overall market trend of flat rentals. It was able to lease out 85 per cent of its first phase and now commands 70 per cent higher rents than its opening lease rate in the third quarter of 2015.
“Due to its extremely high occupancies, it is now able to be selective in choosing fashion and design tenants. As Dubai increasingly strengthens its positions as the art and design hub of the region, we expect a similar positive response to D3’s next phase — provided the district aligns stock and lease rates in line with the market conditions.”
According to Al Shehhi, between phases 1 and 2, 3 million square feet will be built-up. “We haven’t decided on a timeline to launch Phase 2 leasing ... the immediate priority is to complete the infrastructure side of things. With 21.5 million square feet available, d3 is a big project and we are looking at the overall completion by 2020-21.
“We are not thinking of recreating the same experience elsewhere in Dubai ... at least for the time being.”
Hospitality portion
A retail component is already shaping up, with 19 outlets open within Phase 1 as of now. At full bloom, the cluster will have its share of art galleries and avant-garde design workshops.
Then there is the hospitality portion. This will be part of the final phase, which will also have a place for a 1.8-kilometre waterfront running alongside the Dubai Creek. The hotels will together add 2,200 rooms and 1,300 serviced apartments and an outdoor events space.
“As of now, we have only confirmed one boutique hotel for the waterfront,” said Al Shehhi. “There will be more hotels ... but those decisions will need to wait until all of the designs of the master-development are done.”
Factbox: Dubai Design District gets what it wants
\* The d3 cluster remains one of the few office clusters in Dubai to have seen upward mobility on lease terms in recent quarters. It offers both Dubai Economic Department (DED) and free zone ownership formats and “thus caters to a larger occupier audience, in addition to its single owned Grade A stock, making it a preferred destination for high-end fashion and design occupiers,” said David Godchaux of CORE. “D3 structured its initial lease rates very attractively at just around Dh90 a square foot, enticing large anchor tenants and was then able to command higher rates as occupancy levels edged upwards.” According to Godchaux, current lease rates are around the Dh140 to Dh160 square foot mark.
\* The first phase (branded as The Design Quarter) is built around a core consisting of 11 buildings.
• At a later date, the d3 will feature a 1 million square foot “Creative Community”, currently under construction. It will act as the site’s “cultural epicentre” and providing workspaces for 6,500 creatives.
\* In 2015 the value of the UAE design market was estimated at $29.7 billion (Dh108.9 billion).