According to the Dubai Real Estate Market report, the city is on track to significantly expand its office space inventory. By the end of 2026, the total stock is expected to reach 9.7 million square metres, a sharp rise from the current 6.26 million square metres.
This growth will be largely driven by the addition of 415,000 square metres of new office space over the next two years. Of this, 185,000 square metres is anticipated to be delivered in 2025, with a further 230,000 square metres projected for 2026. Notably, a significant portion of these developments will comprise premium, A-grade commercial properties.
A recent report by Knight Frank highlights the robust performance of Dubai’s office market, underscored by a sharp increase in both transaction volumes and values. In 2024 alone, there were 3,150 office sales, totalling AED 6.8 billion — a 36% jump in value and a 7.1% increase in the number of deals compared to the previous year.
Business Bay emerged as the leading location for transactions, accounting for 46% of all deals. The continued rise in office sales reflects a broader trend of economic recovery and investor confidence, supported by the UAE’s steady macroeconomic indicators and favourable business policies.
Record-Breaking Growth Since 2020
The year 2024 marked the fourth consecutive year of positive momentum in the commercial property sector. Since 2020, the total value of office transactions has increased more than fivefold — from AED 1 billion to AED 6.8 billion.
Ready office units dominated the market, constituting 92% of transactions. However, interest in off-plan offices also grew, with a 37% year-on-year rise. The year concluded with 2,900 ready office transactions and 250 off-plan sales.
The office property market saw notable appreciation in both sales and rental prices, each rising by nearly 25% during 2024. The average sales price reached around AED 1,550 per square foot, while rental rates climbed to AED 145 per square foot.
This increase is largely attributed to high occupancy rates, which have strengthened landlords’ positions in the market.
Top Performing Locations
In the segment of ready office sales, Business Bay led the market with 1,343 transactions. Other high-performing areas included Jumeirah Lakes Towers (920), Dubai Silicon Oasis (200), Barsha Heights (148), and Motor City (68).
For off-plan units, Jumeirah Village Circle recorded the most activity with 91 transactions, followed by Dubai Maritime City (65), Culture Village (47), Dubai Silicon Oasis (20), and Jumeirah Lakes Towers (15).
Rental growth varied significantly by location. Downtown Dubai saw rental rates rise by nearly 42%, while DIFC experienced a jump of over 38%. Among non-A-grade spaces, Barsha Heights saw the steepest rise at 43.5%.
Demand Trends: Business Services Lead the Way
Corporate demand continues to be a major driver of the office market. The business services sector accounted for 45% of total office space requirements. Finance and banking followed at 22%, with technology and innovation sectors contributing 6%. Other industries, such as media and design (4%) and real estate (3%), also made notable contributions.
While the market’s strong fundamentals suggest continued resilience, the upcoming wave of new supply over the next 18 to 24 months warrants close monitoring. Future dynamics will hinge on how this influx of stock affects vacancy levels, space absorption, and overall sentiment in the commercial real estate sector. As Dubai pushes forward with infrastructure upgrades and pro-business reforms, long-term demand is expected to remain stable.
Source: https://www.arabianbusiness.com/industries/real-estate/dubai-office-market-to-expand-by-415000-square-metres-through-2026-report
