Abu Dhabi office market surges as economic growth boosts business confidence
MAYS IBRAHIM (ABU DHABI)Abu Dhabi's office market continued its upward trajectory in Q2 2025, as demand for Grade A spaces outpaced supply, according to Savills' latest market report released on Wednesday.The research ties this growth to the UAE's capital's sustained economic momentum, particularly in the non-oil sector which expanded by 6.1% year- on-year in Q1 2025, now accounting for over 56% of the emirate's total GDP.'This positive economic trajectory is boosting business confidence, fuelling strong leasing activity, and increasing demand for high-quality office space,' the report stated.Abu Dhabi Global Market (ADGM), one of the most desired locations due to its free zone status, experienced a 30% year-on-year rise in rental values, now ranging from Dh2,800 to Dh3,500 per square metre per annum.In Q1 2025, ADGM completed its jurisdictional expansion to Al Reem Island, adding approximately 500,000 sq.m of office space.According to the report, ADMG saw the total number of operational firms reach 2,781 - a 43% increase compared to Q1 2024. Notably, financial services entities alone grew by 26% year on year, totalling 367.The report said this expansion has heightened occupier activity in both Al Reem and Al Maryah islands. The workforce on Al Maryah Island, for example, has increased by 17% year on year, now exceeding 29,000.'Demand in H1 2025 was largely driven by banking, financial services, and insurance (BFSI) institutions, hedge funds, consulting firms, and technology companies,' the report stated.'This growth is fuelled by both new market entrants and expansion of existing players, with a notable increase in requirements for units between 10,000 and 20,000 square feet (930 and 1,860 sq.m).'Prime districts such as Capital Centre, Masdar City, and Al Maryah Island continue to witness strong demand due to their high-quality construction, accessibility, and well-developed infrastructure and amenities.Grade B properties in areas like Corniche and Downtown Abu Dhabi are seeing increased interest as tenants seek alternatives amid limited availability, according to the report.To help meet the growing demand, over 100,000 sq.m of office space is slated for completion in 2025. Projects such as Masdar City Square and Yas Place have already achieved healthy pre-commitment levels.In Q2 2025, the completion of SAAS Business Tower on Reem Island added over 12,000 sq.m of Grade A office space to the market.The report also pointed out that 100,000 sq.m of space from developments such as One Maryah Place and Saadiyat Business Park are scheduled for completion by 2027.Looking ahead, Savills anticipates that Abu Dhabi will continue to attract high-net-worth individuals, family offices, and corporates, underpinned by its robust business environment, transparent regulatory framework, and sustained investment from sovereign wealth funds.
'The city's improving infrastructure and quality of life further enhance its attractiveness. With strong pre-commitment levels reported by leading developers such as Aldar and Mubadala, the outlook for the office sector is poised for sustained expansion,' the report stated.
Source: Aletihad - Abu Dhabi
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