Rents of Dubai offices remain stable, driven by continued demand for Grade A offices

Occupier leases increased by 4% in Q2, with small-sized leases dominating, whereas postponement prevailed among large-sized office requirements

The office market in Dubai was very resilient in the second quarter of 2026, with demand for Grade A office spaces exceeding supply, even as occupiers took time to make decisions due to uncertainties in the region, according to Savills.

Office leases have been steadily increasing due to demand coming from small firms, startups, and businesses moving into the emirate, and landlords have been enjoying low availability and low vacancy rates for premium office spaces.

Statistics revealed by the Dubai Land Department showed that there were 38,082 office leasing deals made in the second quarter, representing an increase of 4% compared to the previous quarter. The rise can be attributed mainly to new leases, which went up by 16% to 27,121 deals.

The market was still dominated by smaller office spaces. Offices that were below 500 square feet constituted 66% of the total transactions, given that transactions in the category grew by 17% every quarter due to the strong demand from SMEs and businesses that were looking to enter the market.

Premium Space Continues to Be Popular

Although the level of activity by large occupiers was more conservative this quarter, Savills attributed this to longer approval times rather than lower demand.

Many businesses chose not to relocate or expand due to uncertainty in the geopolitical environment within the regions, while opting to simply renew their leases or adopt flexible workspace concepts. It is expected to see many of those deferred requirements return to the marketplace later in the year.

There was a high demand for top-of-the-line offices.

Notwithstanding the lack of data on the Dubai International Financial Centre (DIFC) provided by the Dubai Land Department, Savills reported that DIFC Square, which was one of the few Grade A office developments delivered this year, was mostly pre-let before its completion.

The report also drew attention to the Immersive Tower, set to be completed by July 2027, wherein considerable amounts of office space have been offered for rent, thereby reflecting the interest in future Grade A space.

Office Rents Remain Stable

The average office rent remained unchanged at Dh238 per square foot in Q2, which was the first quarter when there were no rises in rents since H1 2021.

As per Savills, the process of stabilisation is not to be seen as signalling the start of any market correction. On the contrary, this is just the market moving into a phase of sustainability due to the years of rapid rent increases and scarcity of Grade A space.

“Ticking over several years of excellent leasing and rent growth activity, Dubai’s office sector is now moving towards a more balanced phase,” according to Toby Hall, head of commercial agency at Savills Middle East.

“Although occupiers are now spending longer periods of time deciding on the best possible choices, the demand for good office space is very robust, especially in the Grade A category.”

Savills believes that the trend will slowly pick up during the second half of 2026 due to delayed occupier demand.

A total of 1.9 million square feet of office space will be delivered this year, while the future pipeline of developments is expected to exceed 4.2 million square feet by 2030. Nevertheless, most of the future supply of Grade A offices is expected to be pre-leased or absorbed by current occupier demand.

Demand is expected to be highest in the financial services, tech, trading, and professional services industries, according to Savills, thanks to the diversified economy of Dubai, its appeal to international businesses, and a low supply of top-tier office space.