Dubai’s office market sets new records in first quarter

Dubai’s office real estate market has set new records for sales values and volumes, with investors spending Dh2.8 billion across 933 transactions in Q1 2025, data showed.

According to new insight from leading real estate advisory and property consultant, Cavendish Maxwell, office sales values from January to March this year were 83 per cent higher compared to the same period in 2024, while transaction volumes were up almost 24 per cent.

While ready offices still dominate the sales market, off-plan transaction values rose a staggering 741 per cent – nearly eightfold – to reach a new high of Dh800 million in Q1, against Dh100 million a year ago. Ready office transactions increased by nearly 40 per cent year-on-year. Of the 900+ total transactions, 18 per cent were for off-plan premises, up from 8 per cent in Q1 2024, Cavendish Maxwell’s latest Dubai Office Market Performance report showed.

Vidhi Shah, director, head of commercial valuation at Cavendish Maxwell, said: “These record-breaking figures speak for themselves. Dubai continues to enhance its position as a global business hub and a magnet for businesses large and small. The momentum is real: Q1 2025 saw nearly 40 per cent more foreign company registrations – including multinationals and SMEs – compared to the same time last year, reflecting ever-growing investor confidence and creating unprecedented demand for office space.”

Price trends

Sales prices continue to rise. Q1 2025 saw a jump of almost a quarter (24.5 per cent) year-on-year and increase of 6.5 per cent quarter-on-quarter. As of March, average sales prices stood at Dh1,650 per square foot, compared to Dh1,325 psf in March last year.

Rental rates increased 24 per cent year-on-year and 6.7 per cent compared to Q4 2024, with average office rates reaching Dh160 psf. Hikes were seen across all quality tiers of offices, with limited supply of A-grade space driving increases in B and C space. Downtown Dubai saw the biggest year-on-year growth, up almost 40 per cent. Next were DIFC (39 per cent) and Barsha Heights (38 per cent).

Top areas for transaction volume

Business Bay commanded the number one spot for office sales (ready and off-plan combined) in Q1, with 316 transactions. In second place was Jumeirah Lakes Towers (222), followed by Motor City (130), Barsha Heights (88) and Dubai Silicon Oasis (41).

Almost half (48 per cent) of sales transactions in Q1 were for offices between 1,000 and 2,000 sq ft in size. Premises measuring less than 1,000 sq ft accounted for 40 per cent of sales, while spaces from 2,001-5,000 sq ft accounted for 10 per cent. The remaining 2 per cent were for areas covering over 5,000 sq ft.

Existing and upcoming supply

As of Q1 this year, Dubai’s total office inventory reached nearly 9.3 million square metres of gross leasable area (GLA). Another 215,000 sq m is expected to come to the market between now and the end of the year, followed by a further 181,000 sq m in 2026.

“The surge in off-plan deals can be attributed to buyer trust in upcoming developments, competitive launch prices, flexible payment plans and expectations of long-term capital appreciation. With limited existing supply and rising rental costs, a growing number of tenants are opting to buy as a strategic, long-term cost-saving measure. Ready offices still account for the majority of sales, but it is clear that off-plan properties are very much in demand, and we expect this trend to continue throughout 2025 and beyond. Much of the new supply is concentrated in core business districts, with a significant proportion in the A-grade category. With a strong development pipeline over the next three years, we expect the current supply-demand imbalance to narrow, bringing some relief to tenants and easing upward pressure on prices,” Shah said.

This article is originally published in Khaleej Times.