Dubai’s office market demand is at an all-time high with a sharp rise in occupancy levels and rents witnessed across the city.
Office Market Trends
- The office market is witnessing occupancy levels at an all-time high. City-wide office occupancy is at 89% and Grade A office occupancy level is at 92%.
- 13 Million sq. ft. of office stock has been absorbed in the last three years.
- Only 2 Million sq. ft. of office space is expected to be handed over in the next two years, most of which is pre-leased.
- City-wide office rents increased by 24% year-on-year and are 10% above 2014 peak values.
- Downtown Dubai at 68% and Sheikh Zayed Road (Trade Center) at 50% saw the highest annual office rental increases.
Residential Market Trends
- Off-plan launch volumes slowed down after rallying for several quarters. Q3 2023 saw only 11 new projects launched compared to 57 projects during Q2 2023 and 36 projects during Q3 2022.
- Off-plan transactions also saw a sharp 62% drop in September 2023 compared to August 2023.
- At over 20%, Q3 2023 witnessed the sharpest year-on-year sales price rise since the end of the pandemic. 2022 saw an 11% increase and 2021 saw a 12% increase during the same period.
- Although residential rents continue to rise, the pace is slowing down. City-wide rents in Q3 2023 saw a 20% year-on-year increase compared to 28% in Q3 2022.
- Residential gross yields are at a seven-year high, representing an improvement in returns for residential units due to higher increases in rental prices compared to sales prices.
