Dubai continues to experience a supply shortage, with only 0.89 million sq. ft. of new office stock expected in 2025. Major upcoming projects include the Innovation Hub (2025), DIFC Square (2026), and Aldar’s Office Tower (2027). However, strong pre-leasing activity is absorbing much of this future supply. The market is expected to remain undersupplied through 2026, maintaining upward pressure on rents and occupancy. A potential rebalancing may occur from 2027–2028 as more projects are delivered. In response, off-plan strata office sales have surged, with strong transactional activity driven by investor and end-user demand.
SUPPLY: THE NEAR-TERM SUPPLY SHORTAGE IS EXPECTED TO CONTINUE, WITH A MORE SUBSTANTIAL PIPELINE ANTICIPATED TO EASE CONDITIONS BY 2027/2028.
Dubai continues to face a supply shortage, with only 0.89 million sqft of new stock expected for handover in 2025. Key upcoming projects include Innovation Hub (366,000 sqft) slated for completion in 2025, DIFC Square (600,000 sqft) in 2026, and several large-scale developments in 2027, such as Aldar’s Office Tower (947,223 sqft). However, the majority of these projects are witnessing strong pre-leasing activity, limiting the availability of new stock upon delivery. The market is expected to remain undersupplied through 2026, sustaining upward pressure on rents and occupancy levels, with potential rebalancing anticipated from 2027–2028 as the development pipeline matures. In response to constrained supply and strong latent demand from both investors and end users, the market has witnessed a notable uptick in off-plan strata office sales. Transactional activity across these launches has been robust over recent quarters, reflecting growing interest in commercial assets.
DEMAND: RECORD-HIGH OCCUPANCY ACROSS DUBAI, LED BY GRADE A STOCK
City-wide office occupancy remains strong, with Grade A assets leading at 94%. Grade B and C offices follow closely at approximately 90%, resulting in a robust overall occupancy rate of 92%. Prime locations such as Sheikh Zayed Road, Dubai Design District (D3), One Central, and Downtown Dubai continue to record the highest occupancy levels city-wide.
PRICING: RENTS CONTINUE TO CLIMB AMIDST STRONG DEMAND
Average city-wide office rents have risen to AED 184 per sqft, marking a 22% year-on-year increase. DIFC commands the highest average rents, followed by One Central and Downtown Dubai. Persistently low vacancy rates have bolstered landlord confidence, driving further rental growth and establishing a premium on limited available stock.
