Dubai office market to expand by 415,000 square metres through 2026: Report

Dubai’s office space inventory will expand by 415,000 square metres by the end of 2026, with most new developments falling into the A-grade category, according to research from Cavendish Maxwell.

The property consultant reports that 185,000 square metres will enter the market this year, followed by 230,000 square metres in 2026.

This expansion will increase Dubai’s total office space inventory to 9.7 million square metres from the current 6.26 million.

Dubai office deals soar

The research comes as Dubai’s office market recorded 3,150 sales valued at AED6.8 billion in 2024, representing a 36 per cent increase in values and a 7.1 per cent rise in transactions. Business Bay dominated office sales, accounting for 46 per cent of all transactions.

Vidhi Shah, Partner and Head of Commercial Valuation, Cavendish Maxwell, said: “Dubai’s office market continues to perform strongly, supported by sustained corporate expansion and increased levels of foreign investment. The city’s stable macroeconomic environment, coupled with pro-business legislation, continues to attract both multinational occupiers and a growing base of start-ups and SMEs. This has translated into heightened competition for well-located, prime office space.”

The 2024 figures mark four consecutive years of growth since the pandemic, with sales values increasing fivefold from AED1 billion in 2020 to AED6.8 billion last year.

Ready offices constituted 92 per cent of transactions, though off-plan sales increased compared to 2023.

The market saw 2,900 ready office sales and 250 off-plan transactions in 2024, representing year-on-year increases of 5 per cent and 37 per cent respectively.

Rental prices surge sharply

Both sales and rental prices rose by nearly 25 per cent last year. Sales prices reached approximately AED1,550 per square foot, while rental rates climbed to approximately AED145 per square foot.

Cavendish Maxwell attributes the rental price surge to high occupancy levels, which create market conditions favouring landlords.

Business Bay led ready office sales with 1,343 transactions, followed by Jumeirah Lakes Towers (920), Dubai Silicon Oasis (200), Barsha Heights (148) and Motor City (68).

For off-plan sales, Jumeirah Village Circle topped the list with 91 transactions, followed by Dubai Maritime City (65), Culture Village (47), Dubai Silicon Oasis (20) and Jumeirah Lakes Towers (15).

Rent increases varied across locations, with A-grade premises experiencing the largest year-on-year rises.

Downtown Dubai saw rents increase by nearly 42 per cent, while DIFC rates climbed by more than 38 per cent. Barsha Heights recorded the highest increase for non-A-grade spaces at 43.5 per cent.

Corporate demand driving growth

The business services sector drove demand for new office space, accounting for 45 per cent of requirements.

Finance and banking followed at 22 per cent, with technology and innovation companies (6 per cent), creative, media and design businesses (4 per cent), and real estate and property development firms (3 per cent) comprising smaller segments of demand.

“The market recorded significant growth in both sales and rental values over the past year. Looking ahead, as Dubai further enhances its infrastructure, expands free zone offerings, and rolls out additional business-friendly reforms, demand is expected to remain resilient. However, with a substantial volume of new supply due for delivery over the next 18–24 months, it will be important to track how this impacts vacancy levels, absorption rates, and overall market sentiment,” Shah concluded.

This article is originally posted in Arabian Business.