Dubai office rents soar as commercial property continues to boom

Dubai’s commercial real estate sector is entering a powerful new growth phase, fuelled by increasing demand from occupiers and investors alike.

According to fresh research from Chestertons Mena, average office rents are climbing, occupancy remains near record highs, and the outlook for Grade A and logistics-led space has never looked stronger.

Chestertons’ latest findings show sustained demand for premium offices, especially in core hubs such as DIFC, Business Bay, and Dubai Internet City. These districts continue to command the most attention, thanks to their infrastructure, prestige, and proximity to international business activity. The limited availability of Grade A space has helped push occupancy levels to approximately 95 percent, with citywide office occupancy close to 92 percent, according to the firm.

The surge in demand has translated into steep rent growth. Chestertons’ data (based on Q1 trends) suggest that average office rentals in Dubai are reaching around Dh 190 per square foot, representing a 22 percent year-on-year increase. That gain is being driven in part by a wave of professional services firms, multinational relocations, and expanding regulated-sector businesses.

Smaller or emerging micro-markets are also seeing momentum. Chestertons reports that neighborhoods like Jumeirah Lakes Towers (JLT), Barsha Heights, Dubai South, Mohammed bin Rashid City and Dubai Harbour are attracting leasing inquiries from tech companies, digital media operators, and e-commerce players. Tenants are drawn to these areas not only for competitive rates but also for scalable layouts and excellent connectivity to infrastructure.

Workplace preferences are evolving rapidly in Dubai. Chestertons analysts note a growing demand for turnkey, furnished offices with flexible leases, reflecting the shift to hybrid working models. Landlords are responding by offering shorter lease terms, plug-and-play fittings, and smart office environments. Wellness is also a growing priority: modern commercial buildings now emphasize natural light, biophilic design, high-grade air filtration, outdoor breakout areas, gyms and cafés. Technology is being baked into these spaces, too—expect features like digital room booking systems and high-definition video conferencing.

Investor appetite has followed suit. Chestertons highlights that Grade A commercial assets are particularly attractive to long-term capital, thanks to strong rental performance, supply constraints, and the high occupancy profile. The firm forecasts that the tight supply environment for high-spec space will support rental stability well into the future.

Indeed, supply remains constrained. Chestertons estimates that only about 0.89 million square feet of fresh office stock will be completed in 2025, with growth to around 2.3 million sq ft in 2026 and over 4.1 million sq ft in 2027. But even that pipeline may not be enough: much of it may already be pre-leased or absorbed before completion, according to Chestertons’ projections.

Independent real estate sources back up the tight-supply thesis. Cushman & Wakefield, for instance, reported in its MarketBeat Q1 2025 report that the 0.89 million sq ft of new space expected in 2025 is already witnessing “strong pre-leasing activity,” reinforcing upward pressure on rents and occupancy. Meanwhile, by Q3 2025 Cushman noted that only 770,000 sq ft of new office space had actually come online year-to-date—and warned that the broader supply shortage is likely to persist until 2027.

Other real estate reports echo the trend. According to GulfBase, Savills saw a 45 percent year-on-year jump in average rents across Dubai’s key office submarkets in 2025, including DIFC, Business Bay, Downtown, and Tecom. Knight Frank’s H2 2024 review supports these findings: it recorded a 9.1 percent rise in lease rates, while demand for office space leapt 64 percent year over year, especially from business services, real estate, and banking.

The vacancy picture reinforces this tightness: specialty real estate sources estimate that by Q3 2025, Dubai’s overall office vacancy had fallen to around 7.5 percent, reflecting intense competition for premium space. At the same time, gross rental yields for prime office investments are estimated in the 7–8 percent range, underlining how attractive commercial real estate has become for long-horizon investors.

In February 2025 alone, data show year-on-year growth in sales transactions of 18.2 percent and a total value of Dh 9.7 billion in commercial real estate deals. That surge signals investor confidence in the sector’s long-term performance.

Overall, analysts say Chestertons’ research confirms a strong, structural upshift, with tightening supply, rising rents, and strong investor conviction all converging. For tenants, competition is fierce and lease costs are climbing. “For owners and developers, the confluence of demand and scarcity offers a rare opportunity to lock in premium returns, while for Dubai itself, the commercial boom validates its strategy as a hub for global business and next-generation growth.”