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The future of office space will see demand driven by remote working, workplace design, technology and commuting patterns, according to JLL’s latest UAE Real Estate Market Performance report.

The report said corporates in the UAE are consolidating their operations and implementing cost-reduction measures, with current demand focused on smaller office space of less than 1,000 square metres.

“With demand for office space intrinsically linked to economic performance and growth in employment, we expect this trend to continue in the short-to-midterm,” said Dana Salbak, Head of Research, JLL MENA.

“Looking ahead, we expect corporates to adopt a hybrid model of working, with some of their employees based in HQ offices, while others continuing to work from home, or in flexible office spaces. The game is changing and evolving rapidly, and we expect to see companies apply their own philosophy and ways of working based on business needs and staff comfort levels.”

A JLL MENA survey of corporates to understand how they are responding to re-opening offices has also revealed that the ‘next normal’ will include a mixed implementation of working from the office, working from home, along with ‘working from anywhere’. Respondents to the survey, which included 40 companies from across the UAE, also expect an increased application of technology for daily tasks, along with less travel.

The residential sector, meanwhile, is also seeing major adjustments as a result of the changing marketplace conditions.

Approximately 5,600 and 1,200 residential units were handed over in Dubai and Abu Dhabi respectively over the second quarter, which represents a “significant revision” from originally planned deliveries.

“Project handovers have expectedly experienced delays,” said Salbak. “An additional 38,000 units are scheduled for completion in Dubai over the remainder of the year, but financing restrictions and structural changes in the labor market are expected to delay things further.”

Despite the first half challenges, JLL’s report says the pent-up demand is expected to reflect into figures over the second half of the year, driven by incentives from various landlords and developers, in addition to further government efforts to stimulate demand.

“A delay in supply is not such a bad thing, as the residential market was oversupplied” said Salbak. “In fact, it will help to bring more balance to the market as these projects filter in to the market over the next 18-24 months.”

For further information on the UAE’s office, residential, retail and hotel sectors, please see the report attached.