Ellington's AED 2.8bn Berkeley Tower bets on Business Bay offices

In late October, Ellington Properties and Al Hamra Group launched Berkeley Tower, a commercial development in Business Bay valued at AED 2.8 billion, or about $762 million. Gulf News and Arabian Business both describe it as the largest and tallest commercial project Ellington has undertaken. The tower is planned at around 60 floors of Grade A office space, with robotic parking and several floors dedicated to amenities, positioned close to the Business Bay Metro station.

The partnership pairs Ellington, best known for design-led residential buildings, with Al Hamra, the Ras Al Khaimah group behind large mixed-use communities. Listing pages show office floors, half floors and individual suites being marketed on payment plans, with completion indicated around the turn of the decade, although official handover timing varies between published sources.

The launch arrives when residential off-plan activity has cooled noticeably and new home launches are running far below last year. Developers with capital to deploy are looking for segments where demand still outruns supply, and Dubai's prime office market is one of them. Grade A space in core districts such as DIFC, Downtown and Business Bay has been tightly held for some time, which has kept occupancy and rents firm.

A residential specialist committing its largest single commitment to offices is a signal worth reading. It suggests developers see the commercial cycle running on a different clock from housing, supported by company formation and relocations rather than investor resale flows. It also adds meaningful strata office supply to Business Bay later this decade.

For investors used to residential, strata offices behave differently. Tenants are businesses, leases tend to be longer, fit-out matters, and service charges are typically higher. The income can be steadier, but vacancy periods between tenants can also be longer. We would only consider an off-plan office purchase with a clear view on exit, either to an owner-occupier or with a realistic leasing plan at handover.

For business owners, buying rather than leasing office space in a core district can make sense where the company expects to stay for many years. For residential owners in Business Bay, more Grade A employment space within walking distance supports long-term rental demand, even if it does nothing for prices in the short term.