Real Estate & Construction

Dubai Office Rents Stabilise as Demand for Grade A Space Remains Strong

Dubai's office market remained resilient during the second quarter of 2026, with Grade A office space continuing to attract strong demand despite businesses taking longer to finalise leasing decisions amid regional geopolitical uncertainty, according to a new report by Savills.

The consultancy said leasing activity continued to grow, supported by small and medium-sized enterprises (SMEs), startups, and international companies expanding into Dubai. At the same time, limited availability of premium office space and low vacancy rates continued to support landlords.

According to Dubai Land Department (DLD) data, 38,082 office leasing transactions were completed during the second quarter, representing a 4% increase compared to the previous quarter. The growth was driven by new leases, which rose 16% to 27,121 transactions, while lease renewals declined to 10,961.

Smaller Offices Lead Leasing Activity

Demand remained strongest for office units smaller than 500 square feet, which accounted for 66% of all leasing transactions after recording a 17% quarter-on-quarter increase.

Savills attributed the continued popularity of smaller offices to the steady influx of SMEs and new businesses drawn by Dubai's business-friendly environment and competitive occupancy costs.

Grade A Offices Continue to Attract Occupiers

Although leasing decisions by larger occupiers slowed during the quarter, Savills said the trend reflected longer approval processes rather than weakening demand.

Many companies delayed expansion or relocation plans due to regional uncertainty, opting instead to renew existing leases, selectively expand operations, or utilise flexible workspace solutions. The consultancy expects many of these deferred leasing requirements to return during the second half of 2026 as business confidence improves.

Demand for Grade A office space remained particularly robust.

Savills highlighted that DIFC Square, one of the few major Grade A office developments completed this year, was substantially pre-leased before completion, reflecting sustained demand for premium commercial properties.

The report also noted strong interest in Immersive Tower, scheduled for completion in July 2027, with a significant portion of its office space already under offer.

Office Rents Enter More Sustainable Phase

Average office rents remained unchanged at Dh238 per square foot during the second quarter, marking the first quarter without rental growth since the first half of 2021.

Savills said the stabilisation should not be viewed as a market slowdown but rather as a transition to a more balanced and sustainable growth phase following several years of rapid rental increases.

Toby Hall, Head of Commercial Agency at Savills Middle East, said Dubai's office market continues to demonstrate resilience despite occupiers taking more time to evaluate leasing options.

He noted that demand for high-quality Grade A office accommodation remains strong and is expected to strengthen further as postponed leasing requirements return to the market later this year.

Future Supply Expected to Be Quickly Absorbed

Approximately 1.9 million square feet of office space is expected to be delivered in 2026, while Dubai's office development pipeline is projected to exceed 4.2 million square feet by 2030.

However, Savills expects much of the upcoming Grade A office supply to be either pre-leased or rapidly absorbed, limiting its impact on overall market conditions.

The consultancy forecasts continued demand from the financial services, technology, trading, and professional services sectors, supported by Dubai's diversified economy, international business appeal, and limited supply of premium office space.