Dubai office rents up 45 per cent!
DIFC, Business Bay, Downtown Dubai, and TECOM are proving to be popular Dubai office locations
Dubai’s office market continues to show strong fundamentals, with rising demand, increased occupier activity, and a dynamic shift in market behaviour, according to the latest Savills Dubai Office Market in Minutes – Q1 2025.
The emirate has entered a new growth phase, characterised by higher rental prices, reduced vacancy rates, and increasing competition for prime commercial spaces, Savills reported.
In Q1 2025, Dubai experienced an average year-on-year office rental price growth of 45 per cent across 22 sub-markets.
Dubai office market:
Key business districts such as DIFC, Business Bay, Downtown Dubai, and TECOM are performing particularly well, with DIFC’s occupancy rate reaching 98 per cent.
As a result, well-located, Grade A spaces are increasingly in demand by both regional and international occupiers.
Simultaneously, Dubai saw a 4.9 per cent increase in net effective occupier costs in Q1 2025, as stated in Savills global cost benchmarking report. This metric reflects the total cost to occupiers, including base rent, fit-out expenses, and other related costs, providing a more comprehensive view of overall leasing expenditure.
This increase places Dubai among the most active and competitive prime office markets in the world. The city now ranks eighth globally for total prime office occupancy costs, averaging $148.9 per sq ft per annum, reflecting the emirate’s continued appeal as a key hub for the Middle East, Africa, and South Asia.
Toby Hall, Head of Commercial Agency at Savills Middle East, commented: “This growth reflects confidence in Dubai’s long-term positioning. Companies are viewing Dubai not just as a regional base but as a global node for innovation, finance, and enterprise. The rise in rents and costs mirrors the demand for quality and the limited availability of premium spaces.”
Demand remains high, driven by core sectors such as financial services, consulting, and technology and media, which represented more than half of Savills transactions in Q1. Smaller, agile companies are also becoming more active, particularly in sub-markets offering value and accessibility, such as Dubai South and Expo City.
The Dubai Chamber of Commerce reported that 70,500 new companies were welcomed in 2024, a 4.6 per cent increase year-on-year, further demonstrating growing confidence in the business environment.
As new entrants seek flexible, well-connected, and high-specification workplaces, many are turning to serviced office providers, who are expanding into community-centric and mixed-use locations.
While supply of Grade A stock remains tight in established districts, landlords are responding proactively by offering more tailored leasing terms, enhanced amenities, and refurbishment strategies to meet evolving occupier expectations. In some cases, strata landlords in Business Bay are now quoting rents comparable to those in DIFC, reflecting the broader increase in perceived value across sub-markets.
Lease renewals remain a preferred choice for many businesses, particularly outside DIFC, where RERA rental protections offer added stability in a rising cost environment.
Occupiers are also reevaluating how they use their office space, prioritising functional layouts, optimisation, and long-term adaptability over expansive floorplates or intricate fit-outs.
Looking ahead, new office developments are in the pipeline, though many are already seeing significant pre-commitment levels. This indicates ongoing market confidence and suggests that competition for high-quality spaces will remain a key theme throughout 2025.
Hall concluded: “Dubai’s office market is evolving, not tightening. The data indicates growing maturity, where rental increases reflect sustained interest, strong business fundamentals, and a shifting view of Dubai as a long-term destination for global enterprise.”
