Co-working spaces are emigrating from Russia
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The active migration of specialists and startups from the Russian Federation to Dubai stimulated the interest of Russian coworking operators in this area. Codevelopment has invested almost 2 billion rubles. in the acquisition of 4 thousand square meters. m in the Burj Daman business center to create a flexible office. Market participants call this format promising in the UAE, as operators can rent premises twice due to the need for business in virtual space when registering companies in this emirate. But the hype that has begun contributes to the overestimation of real estate prices, which is why not all projects will be profitable.
Codevelopment bought out 4,000 sq. m. m in the business center Burj Daman in the business district of Dubai, Kommersant was told in the company. The deal amounted to $30 million (1.9 billion rubles) – these are private borrowed funds. According to the managing partner of Codevelopment Rostislav Bidenko, in May 2023 it is planned to open a flexible office under the company’s brand here.
Codevelopment is controlled by Rostislav Bidenko and Gurgen Shekoyan, the company says. Previously, they developed the Ceo Spaces coworking network in Moscow. Now, according to information on the website, the company has eight different flexible offices with a total area of 28 thousand square meters. m. The project in Burj Daman is the first abroad, in the future the partners are considering the possibility of buying another 2 thousand square meters. m in Dubai. We can also talk about access to Armenia and Uzbekistan.
Mr. Bidenko points out that Codevelopment’s flexible office at Burj Daman is focused on corporate clients: the company is now in talks with Russian companies expanding their business in the Middle East.
Meeting Point CEO Larisa Afanasyeva believes that the activity of Russian operators in foreign markets is dictated by business relocation and a wave of emigration: “The market is counting on the potential demand for coworking spaces in the UAE, Turkey and Armenia, where most Russians have left.” The Klyuch network notes that IT personnel and various startups have begun to actively come to the UAE.
The growing demand for coworking spaces in Dubai, according to Alexander Pestryakov, head of foreign projects at Becar Asset Management, is also due to the fact that they are actively used as a virtual space when registering a company. In this case, according to the expert, the structure concludes an agreement, which implies that it is impossible to physically use the space. At the same time, the object can be handed over again to the actual tenant who will work in it.
Codevelopment CEO Gurgen Shekoyan calls the company’s entry into the Dubai market an opportunity to diversify its business: this will allow it to start earning in a currency with a lower yield, but more stable. He considers the direction promising due to the increase in average rental rates over the year and the low share of flexible spaces in the office market – 1.5% of the total supply. Nikoliers partner Stanislav Bibik cites London, where co-working spaces form 5% of the office market, and Amsterdam (8%) for comparison. Aleksey Novikov, managing partner of NF Group, points out that it is precisely for reasons of obtaining foreign exchange income and market capacity that Russian operators are interested in the UAE, where the Space 1 and Grow Up networks have already entered.
At the same time, Mr. Pestryakov calls the UAE market “quite complex.” The expert points out that it is impossible to get a loan for construction here, loans are possible only for a finished object. Real estate companies also require a partner who is a citizen of the UAE. “He will perform the functions of a service agent, act as a guarantor; The cost of services varies: you can find a person for $5,000, or you can find one for $50,000 or $100,000,” says Mr. Pestryakov. Another risk factor, the expert calls the general hype in the market: projects will be sold at exorbitant prices and it is not a fact that they will turn out to be profitable.
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