Dubai’s office market is experiencing record growth, with demand outstripping supply as city-wide occupancy rates reach 92% and rents rise by 22% year-on-year. Upward pressure on rents and occupancy levels is expected to continue in the near-term.
SUPPLY: DUBAI OFFICE MARKET SUPPLY STRUGGLES TO MEET RISING DEMAND, KEY DEVELOPMENTS ON THE HORIZON
In 2024, over 650,000 sq. ft. of office GLA was delivered, with the majority pre-leased. Looking ahead to 2025, a total of 1.66 million sq. ft. is expected to come online, yet demand continues to outpace supply. Key project handovers in 2024 included 6 Falak in Dubai Media City, A2 in Dubai CommerCity, Millennium Downtown on Sheikh Zayed Road, and Technohub3 in Dubai Silicon Oasis. Significant future completions, particularly Grade A developments in DIFC and Sheikh Zayed Road, are anticipated between 2026 and 2028 and are expected to alleviate the supply crunch in those areas.
DEMAND: STRONG ABSORPTION AND RECORD-HIGH OCCUPANCY LEVELS UNDERPINNED BY REGIONAL AND GLOBAL DEMAND
In 2024, 4.01 million sq. ft. of office space was absorbed, reaching a 92% city-wide occupancy. Grade A offices led at 95%, followed by Grade B and C at 91%. Office demand was predominantly driven by relocations and expansions in 2024. The financial and business services sector accounted for nearly 29% of total office enquiries, as Dubai continues to attract regional and global players. While demand for all types of units remains high, CAT A fit-out spaces are particularly preferred due to their ready-to-occupy nature, requiring minimal design interventions and reducing occupational timelines. Furthermore, a growing scarcity of office units above 2,000 sq. ft. is intensifying competition for large spatial requirements.
PRICING: CITY-WIDE OFFICE RENTS REACHED AN ALL-TIME HIGH
Citywide office rents reached AED 174 per sq. ft., marking a 22% year-on-year increase. Persistent high occupancy levels have strengthened landlord confidence, driving continuous rental growth and premium pricing for the scarce office space available, with the market remaining strongly landlord-friendly.
