Dubai Office Market Stabilises in Q1 2026 as Occupier Strategy Takes Centre Stage

Business

Dubai Office Market Stabilises in Q1 2026 as Occupier Strategy Takes Centre Stage

Savills Middle East has reported a stabilisation in Dubai’s office market during Q1 2026, with average rents holding steady at AED 238 per sq ft. This marks the first quarter since H1 2021 without rental growth, signalling a shift in market dynamics.

Despite the pause in quarterly increases, year-on-year rents remain 14% higher compared to Q1 2025, reflecting the strong growth momentum built over the past two years. The slowdown has been attributed to regional uncertainty, including the conflict that began in late February 2026, alongside seasonal factors such as Ramadan and Eid, which temporarily impacted business activity and decision-making.

According to Savills, market sentiment remains positive, with businesses continuing operations as usual. Many occupiers have adopted a cautious, wait-and-see approach, rather than making abrupt changes, reinforcing long-term confidence in Dubai’s office sector.

A key trend emerging in the market is the growing influence of tenant-led strategies. Instead of focusing solely on rising rents, occupiers are prioritising tenure security, operational efficiency, and long-term value. Regulatory frameworks, including rental protections and renewal policies, are also encouraging businesses to retain existing office spaces.

Demand continues to be supported by strong business formation activity, with the Dubai Chamber of Commerce recording over 71,830 new companies in 2025. Data from the Dubai Land Department and Savills indicates that 97% of office transactions in Q1 2026 involved units under 3,000 sq ft, highlighting demand from new entrants and expanding businesses seeking flexible workspace solutions.

Looking ahead, the market is expected to evolve with the introduction of new office supply, including approximately 2 million sq ft in 2026 and an additional 1.6 million sq ft in 2027. This increase in availability may help ease pricing pressures and create new opportunities for tenants, particularly in competitive submarkets.

Prime commercial hubs such as Dubai International Financial Centre One Central and Business Bay are expected to remain resilient, supported by demand from financial services, professional firms, and corporate entrants.

Toby Hall, Head of Commercial Agency at Savills Middle East, noted that the market is entering a more mature phase, where the emphasis is shifting from rental escalation to strategic occupancy planning. He added that despite regional headwinds, Dubai’s office market continues to demonstrate strong fundamentals and resilience.