Dubai to deliver 415,000 sq m new office space by 2026-end
Around 185,000 sqm of new space is due to come to market this year, with another 230,000 sqm in 2026, as demand for quality offices in Dubai continues to rise, it stated.
By the end of next year, Dubai's total office space inventory will reach almost 9.7 sqm, compared to 6.26 sqm today, said the expert in its latest Dubai Office Market Report.
2024 saw record transaction volumes and values in recent years, with 3,150 sales valued at AED6.8 billion ($1.85 billion), a 36% rise in values and a 7.1% in increase in transactions, it added. Business Bay led the field for office sales, accounting for over 46% of transactions.
Vidhi Shah, a Partner and Head of Commercial Valuation, Cavendish Maxwell, said: "Dubai's office market continues to perform strongly, supported by sustained corporate expansion and increased levels of foreign investment."
"The city's stable macroeconomic environment, coupled with pro-business legislation, continues to attract both multinational occupiers and a growing base of start-ups and SMEs. This has translated into heightened competition for well-located, prime office space," she added.
According to Shah, the market recorded significant growth in both sales and rental values over the past year.
"Looking ahead, as Dubai further enhances its infrastructure, expands free zone offerings, and rolls out additional business-friendly reforms, demand is expected to remain resilient. However, with a substantial volume of new supply due for delivery over the next 18–24 months, it will be important to track how this impacts vacancy levels, absorption rates, and overall market sentiment," she added.
Cavendish Maxwell said office values and transaction volumes reached their highest peak in 2024, marking four consecutive years of growth since the 2020 pandemic.
Sales values have surged five-fold, from AED1 billion in 2020 to AED6.8 billion in 2024, primarily driven by increased demand from both local and international buyers, it stated.
Ready offices continue to dominate sales activity, accounting for nearly 92% of transactions – down slightly from 2023 owing to a rise in off-plan sales.
Increased demand for off-plan offices is fuelled by growing investor confidence, demand for new accommodation and attractive payment plans. Businesses are also securing office space for the long term by buying off-plan to avoid the risk of future rent hikes, it added.
According to Cavendish Maxwell, there were 2,900 ready office sales and 250 off-plan transactions in 2024 – a year-on-year rise of 5% and 37% respectively. Average sales and rental prices up almost 25%
Office sales and rental prices rose nearly a quarter last year, reflecting sustained demand for ready offices, business expansion and new companies being established.
Sales prices reached approximately AED1,550 per square foot, while rental rates hit approximately AED145 per sq ft.
The real estate expert said the surge in rental prices was mainly driven by high occupancy levels, which favour landlords and can be a challenge for tenants in securing prime office space.
As demand for prime space continues to rise, landlords are likely to refurbish existing stock to command higher rentals, it added.
Business Bay topped the ready office sales chart in 2024, with 1,343 sales representing more than 46% of all transactions, followed by Jumeirah Lakes Towers (920 sales), Dubai Silicon Oasis (200), Barsha Heights (148) and Motor City (68).
In the off-plan market, Jumeirah Village Circle emerged as the most popular area, with 91 transactions, followed by Dubai Maritime City (65), Culture Village (47), Dubai Silicon Oasis (20) and Jumeirah Lakes Towers (15).
Year-on-year office rents have risen across Dubai, with A-grade premises commanding some of the biggest year-on-year increases. In Downtown Dubai, rents rose by nearly 42%, with DIFC rates up by more than 38%. Barsha Heights saw the highest rise for non-A-grade spaces, with a 43.5% hike.
Copyright 2024 Al Hilal Publishing and Marketing Group Provided by SyndiGate Media Inc. (Syndigate.info).
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