Dubai office prices, rents jump by 24% in first 3 months of 2025

Dubai's office market will remain landlord-driven due to limited availability and sustained demand.

According to analysts at Cavendish Maxwell, the shortage of Grade A office space is driving spillover demand, pushing prices higher in Grade B and C segments.

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“Office sales prices rose 24.5 per cent year-on-year, while rental rates increased by 24 per cent, fuelled by limited availability and sustained demand, especially in Grade A accommodations. Additionally, ongoing shortages of Grade A space are driving spillover demand, pushing prices higher in the Grade B and C segments,” analysts said in the first quarter report.

Dubai’s office market maintained strong momentum in the first quarter of 2025 as the Dubai International Chamber reported a 39 per cent year-on-year increase in new foreign company registrations, including 11 multinational corporations and 42 SMEs.

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“Dubai’s office market entered 2025 with strong momentum, supported by steady economic growth, high levels of business formation, and resilient trade performance, all within a stable macroeconomic environment. This foundation is further strengthened by strategic infrastructure development, world-class connectivity, and a pro-business regulatory framework. Together, these factors have driven robust performance in the first quarter of 2025, reaffirming Dubai’s status as a leading destination for regional and international capital despite ongoing geopolitical and economic uncertainties,” said analysts at Cavendish Maxwell.

In the remainder of 2025, analysts see the office supply pipeline remains robust and may offer some relief to tenants.

It is projected that approximately 215,000 sqm of new office space is expected to enter the market; however, actual completions are often lower than projected due to market factors, while pre-booking of units further reduces immediate availability.

“As a result, occupancy rates are expected to remain elevated throughout 2025, supported by strong and sustained demand that continues to outpace supply. Given this supply-demand dynamic, the market is expected to remain landlord-driven, with landlords maintaining significant leverage. Both sales and rental prices are projected to rise further throughout 2025, primarily due to ongoing supply constraints,” said analysts at the property consultant firm.

It added that some tenants may downsize or relocate, while others might embrace flexible workspaces or pre-commit to pipeline projects.

The office sales market reflected this positive sentiment, with approximately 900 transactions completed in Q1 2025, a 23.7 per cent year-on-year increase, driven by strong activity in both ready and off-plan segments.

Notably, off-plan transactions surged, accounting for 18.9 per cent of all deals compared to just 8.1 per cent in Q1 2024, highlighting growing buyer confidence in future developments.

• Dubai

Waheed Abbas

waheedabbas@khaleejtimes.com

Waheed Abbas is Assistant Editor, covering real estate, aviation and other business stories that directly affect the lives of UAE consumers. He frequently reports human interest stories, too.