According to a report released on Wednesday, the average Grade A rental values in the third quarter of this year increased by 25% year over year, indicating that Dubai’s commercial office market is hitting new heights.
Savills’ Q3 2024 Dubai Office Market report states that during that time, certain locations, such as Business Bay and Downtown, saw increases of 44% and 36%, respectively.
In the first half of 2024, over 24,000 new businesses were registered, representing a 5% increase from the previous year. This increase emphasizes the emirate’s standing as a center for global trade and innovation and the robust economic momentum fueled by the Dubai Economic Agenda (D33). Occupancy rates in major business districts like DIFC, Downtown, and Business Bay currently range from 95% to 97%, indicating strong demand for premium office space.
The market is dominated by DIFC’s premier properties, which have reported rent increases of up to 25%. Meanwhile, new construction projects like DIFC Square and Immersive Tower are expected to add more than 10 million square feet of first-rate office space by 2028.
The city’s real estate market is more competitive than ever, making Dubai a top international business destination. The demand for prime commercial space is being driven by a significant increase in new business registrations and expansion activities by existing firms, including those in the finance and technology sectors.
“Dubai’s office market growth underscores its appeal as a global business hub, bolstered by ease of setup, favourable tax conditions, and a strategic location,” said Toby Hall, head of commercial agency at Savills Middle East. “Businesses are establishing or expanding their presence here, recognising the value of high-quality office spaces that support talent attraction and growth. This demand signals further market evolution in the years ahead.”
Paula Walshe, director of transactional services at Savills Middle East, added: “The unprecedented rental increases and high occupancy rates demonstrate Dubai’s standing as a premier destination for global business expansion. We’re seeing strong interest from international firms, especially in finance and technology, prioritising flexible office spaces to meet their ambitious growth targets and align with Dubai’s strategic vision.”
Additionally, businesses are choosing open-plan layouts and co-working spaces like those provided by Executive Center and Cloud Spaces in response to the growing demand for flexible workspaces brought on by the rise of hybrid working models. Startups and new entrants looking for flexible lease terms and a quick operational setup find these spaces especially appealing.
Although the demand for office space is concentrated in areas with premium offerings, rental prices for more reasonably priced options are also rising significantly, as evidenced by the 37% year-over-year increase in Dubai Science Park and Dubai Investments Park. A more affordable alternative to the central business districts, Expo City offers first-rate amenities and robust transportation connections.
According to the report, as more companies establish themselves in Dubai to benefit from its advantageous location, encouraging business climate, and first-rate infrastructure, this demand is expected to persist throughout the year.
