OFFICE SUPPLY PIPELINE BUILDING AFTER YEARS OF CONSTRAINED DELIVERY
Just 50,000 sqft of office space was delivered in Q3 2026, with a further 770,000 sqft expected to be completed in Q4 2026, led by Sweid One in JLT, Technohub5 in DSO and Innovation Two in DIFC, bringing total office completions for the year to 1.7 million sqft. Much of this space is already pre-let, which should limit its near-term impact on availability. However, deliveries are set to accelerate from 2027 onwards. Sheikh Zayed Road (Trade Centre–Interchange 1) and Business Bay together account for over 8.3 million sqft of office supply pipeline through 2031, driven by a strong run of strata office launches and the repurposing of two large existing assets into office developments. DIFC is expected to add around 4 million sqft over the same period, but as most of this stock is held under single ownership within DIFC’s jurisdiction, it continues to attract steady occupier interest, as evidenced by pre-leasing activity. As the pipeline is delivered, we expect performance to become increasingly tiered, with single-owned Grade A stock and strata stock following different trajectories. Performance is also expected to vary by district, reflecting differences in demand drivers and occupier mix.
OCCUPIER SENTIMENT REMAINS RESILIENT
Leasing activity picked up in Q3 2026 following a relatively slower Q2. Renewal volumes held stable, while new lease activity softened marginally, with many occupiers choosing to stay in their existing premises and new market entrants remaining cautious. Existing global occupiers continue to maintain their current footprints, with some also pursuing expansion. Flex operators are now among the city’s largest occupier groups, taking up nearly 10% of new space in the last 12 months. Their growth reflects occupier demand for flexibility in an uncertain environment, while landlords increasingly treat them as partners in lifting occupancy and filling large floorplates.
OFFICE RENTS REMAIN FIRM AS ACTIVITY AND SUPPLY REBALANCE
Average city-wide office rents in Dubai stood at AED 213 per sqft in Q3 2026, up 4% QoQ, following the softer conditions of Q1 and Q2. City-wide occupancy held steady this quarter, with no nominal change following the adjustment recorded in Q2, and remained above last year's levels. Tenant churn was absorbed without any marked shift in occupancy, while the gradual return of strata office stock to the market has added to available options. As with any market cycle, this period of stabilisation should be viewed as a healthy adjustment, improving availability and affordability after a prolonged phase of exceptionally tight conditions. We expect the market to remain broadly balanced in the near term, with rental growth likely to be more measured as new supply is handed over.
