Dubai’s Office Market – Supply, Demand, and Opportunity

With the world still recalibrating its relationship with office space post-pandemic, Dubai presents an anomaly. While commercial towers in cities like London, New York, and Hong Kong grapple with under-occupancy and uncertain futures, Dubai’s office market is surging ahead, defying market expectations and setting benchmarks. But behind the headlines of soaring rents and record-high occupancy lies a complex landscape, one that investors and occupiers alike must navigate with precision.

The Surge Behind the Stats

Office space in Dubai is no longer just a commodity. It has become a strategic asset for investors. Prime business districts such as the Dubai International Financial Centre (DIFC), Downtown Dubai, and Business Bay are reporting occupancy rates of 95% and above, with DIFC having hit around 96% by the end of 2024. Rents in these coveted areas surged 22% in 2024 alone, with further increases of 10–12% forecast for 2025.

The pace of business registration tells a similar story. In the first half of 2024, more than 24,000 new businesses entered the market, a testament to Dubai’s enduring appeal as a global business hub.

These figures paint a clear picture: demand is not only strong, but also relentless.

Pressure on Supply: Soon but Not Soon Enough

Despite a more active pipeline of developments in 2025, with 1.66 million square feet of new space expected to be added, the gap between supply and demand of office space remains stark in Dubai. Analysts forecast that the undersupply will persist until at least 2027–2028. Crucially, much of this upcoming inventory is already pre-leased, particularly in DIFC and Sheikh Zayed Road, where the lion’s share of new development is focused.

It’s also worth noting that 78% of the new supply is set to arrive in free zones. This suggests that while offshore areas offer immediate business advantages such as tax reliefs, operational flexibility, and regulatory ease, onshore demand may continue to experience tighter constraints, with fewer available options for growing firms tied to the mainland.

What’s Fueling Dubai’s Office Market Boom?

At the core of this robust performance is Dubai’s strategic positioning, both geographically and economically. Situated at the crossroads of Asia, Europe, and Africa, the city offers unmatched connectivity. Its transport infrastructure, regulatory framework, and tax environment have created an ecosystem that is not just conducive to business but actively designed to attract it.

From global hedge funds and wealth managers to technology startups and multinational consultancies, a broad spectrum of industries is expanding their presence. The BFSI (banking, financial services, and insurance) sector has driven significant leasing activity throughout 2024, echoing confidence in Dubai’s financial and regulatory environment.

The New Office is Smaller, Smarter, More Strategic…Is Dubai Ready?

Yet, the market is not without evolution. While demand continues to soar, the nature of office occupation is changing. Hybrid work models, though less dominant than in Western cities, are influencing preferences. Companies now seek high-efficiency layouts, smarter building technology, and access to lifestyle amenities. The result? A shift toward flexible space, co-working environments, and shorter lease terms, even in premium locations.

This evolution introduces both opportunity and complexity. Businesses must weigh immediate rental costs against long-term operational efficiency. For many, the rise of well-equipped, cost-effective alternatives in districts like Dubai Science Park and Expo City offers an appealing compromise between location and affordability.

So, How Should Tenants and Investors Proceed in this Market?

For tenants, time is of the essence. In a market where demand consistently outpaces supply, early lease commitments are essential. Businesses should consider exploring free zones and emerging districts where supply is more readily available, and costs remain competitive.

Flexibility is also key. Solutions like co-working spaces can provide scalability while maintaining brand presence in key locations.

Investors, on the other hand, must take a long-term view. With yields compressed in core areas, strategic value lies in identifying underdeveloped zones with strong fundamentals, areas benefitting from upcoming infrastructure, connectivity improvements, and future-ready zoning regulations.

Moreover, buildings with green certifications, tech integration, and wellness-focused design are commanding premium rents and attracting global tenants. ESG considerations are quickly becoming a central pillar of asset valuation and tenant preference.

Partnering for Perspective and Performance

In such a dynamic environment, insight matters. At Cavendish Maxwell, our RICS-certified commercial property consultants and investment experts provide clients with data-driven guidance and bespoke advisory services. Whether you’re a multinational expanding your regional footprint or a private investor evaluating commercial opportunities, we help you navigate complexity, identify value, and secure long-term investments that align with your unique goals.

As the market moves forward, clarity, strategic foresight, and the assurance of having a partner who understands both the macroeconomic shifts and the granular nuances of Dubai’s commercial real estate will make all the difference.

Get in touch with us to explore Dubai’s commercial real estate market and capitalise on early opportunities.