The lack of space is making it more difficult for foreign companies to profit from the sheikdom's economic boom, said Nicholas Maclean, managing director of the firm's business in the region.

Some companies have agreed to occupy premises that won't be built for two years, he said.

"There's a desperate shortage, " Maclean said in an interview. In some cases, companies are "running their operations from other locations until the space eases up" in Dubai, the most noted of the seven emirates that make up the United Arab Emirates.

The UAE economy, the Arab world's second-biggest after Saudi Arabia, grew 8.9% in 2006 as the country earned an average of $65 per barrel of oil, about 22% higher than the previous year.

That's helped draw in companies such as Baker Hughes to Dubai, the second-largest sheikhdom, and the biggest UAE emirate, Abu Dhabi.

David Lesar, Halliburton's chief executive officer, plans to move to Dubai to oversee the company's expansion in the Middle East and Asia. The world's second-largest oilfield-services provider is "looking at a number of potential places to put an office, " spokeswoman Cathy Mann said in an e-mail.

Merrill Lynch, the world's biggest brokerage, and the Bermuda-based insurer Lancashire Holdings are also looking for office space in Dubai. Baker Hughes, the third-largest oil contractor, plans to create as much as 700,000sq ft of space at the Jebel Ali Free Zone, a 25-acre site owned by the government where foreign companies benefit from government incentives and tax breaks.