Latest news with #DubaiOfficeMarketReview
Al Etihad
5 days ago
- Business
- Al Etihad
Abu Dhabi office market sees surge in demand in H1 2025: Report
14 Aug 2025 18:20 A. SREENIVASA REDDY (ABU DHABI)Demand for office space in Abu Dhabi soared in the first half of 2025, with requirements exceeding 5 million square feet, marking a 110% increase compared to the same period last year, according to Knight Frank's Abu Dhabi Office Market Review. Business services remained the largest driver of demand, accounting for 32% of requirements, followed by government entities at 9%.Faisal Durrani, Partner – Head of Research, MENA, said new rental contracts had been a key driver of market activity in 2025, with transaction volumes peaking in January, signalling fresh demand and corporate expansion in the UAE capital. Occupancy levels across the city's Grade A stock remain at record highs, with limited availability sustaining and, in many cases, driving up rents for best-in-class leasing market, however, showed a mixed performance across submarkets in the second quarter. Musaffah led quarter-on-quarter rental growth with a 73% increase, followed by Al Bateen at 68% and Al Hisn at 19%. More established districts such as Al Danah and Al Nahyan experienced minor corrections, with rents slipping by 2% and 7% respectively, reflecting a higher concentration of older, secondary stock that is less favoured by Hodgetts, Partner – Occupier Strategy & Solutions, MEA, noted that there is 'good news on the horizon' with a strong pipeline of high-quality developments poised to enter the market. This new supply is expected to ease current constraints, offer occupiers greater choice, and set new benchmarks for quality, sustainability and design. Immediate completions include Aldar's HB Tower in Yas Island, providing 238,647 square feet of Grade A space, and the Saas Business Tower on Al Reem Island, delivering 129,210 square feet. Both developments are positioned to appeal to international and domestic corporate occupiers seeking flagship office supply pipeline points to a surge in new stock from 2027, with nearly 175,000 square metres of office space scheduled for delivery that year, following more modest additions of around 51,000 square metres in 2025 and just over 43,000 square metres in 2026. Shehzad Jamal, Partner – Strategy and Consultancy, MENA, said: 'Demand is likely to remain robust and continue to outpace the delivery of premium supply for the rest of the year, fuelling further rental growth in the prime segment. Pre-leasing activity for landmark projects scheduled for 2026–2028 will be a key indicator of sentiment, with the performance gap between Grade A, well-located assets and older secondary stock expected to widen as the flight-to-quality trend intensifies.'In Dubai, the Dubai Office Market Review showed record high-value transactions, with 83 office sales over Dh10 million in H1 2025 — a 207% jump from H1 2024. Average prices in Downtown climbed above Dh5,000 per square foot, while Business Bay surpassed Dh2,000 per square foot for the first time. The business services sector drove 38% of Dubai's total demand, followed by technology (31%) and real estate (12%).Durrani said Dubai's Grade A vacancy rates were 'at record lows,' contrasting with other global gateway cities, while Adam Wynne, Partner – Head of Commercial Agency, UAE, noted strong occupier demand for entire floors or buildings in upcoming developments. Knight Frank forecasts that by 2030, Dubai's office stock will reach nearly 148 million sqft, supported by more than 25 million square feet of new supply, much of it already being sold off-plan.
Zawya
10-03-2025
- Business
- Zawya
Knight Frank: Dubai's office rents climb 9.1% in H2 2024 amid rising demand
Prime office occupancy levels are above 95% in key business districts like the DIFC and Business Bay Business services, real estate, and the banking & finance sectors drove the new prime office demand in 2024 Dubai: In H2 2024, average office lease rates across Dubai's key submarkets showed strong growth, rising by an average of 9.1% in H2 2024, with the highest rental growth being registered in Trade Center District (96%), according to the H2 2024 Dubai Office Market Review by global property consultant Knight Frank. Faisal Durrani, Partner – Head of Research, MENA, commented: 'Dubai's office market continues to experience rising levels of demand in the form of new business entrance as well as expanding businesses. This rising demand means that prime office space is in exceptionally short supply city-wide. 'The narrative in Dubai is very different than the global office story. With supply continuing to lag demand and be snapped up during the construction of new office buildings, we expect rents to sustain their upward trajectory. Despite recent growth, office rents still trail pre-global financial crisis. Indeed, prime rates in the DIFC are still about 50% below 2009 levels.' GROWING DEMAND AND UPCOMING SUPPLY During 2024, Knight Frank recorded 1.28 million sqft of new office space demand, a 64% increase on 2023. The top sectors contributing to the demand are business services, real estate, and the banking & finance sectors, which collectively contributed to 843,111 sqft of new demand in 2024, each representing 23%, 23%, and 20% of total requirements, respectively. Knight Frank projects that Dubai's prime office supply will reach approximately 8.2 million between 2025 and 2028. This is up 86% when compared to the 4.4 million sqft delivered between 2021 and 2024. The DIFC currently reports nearly 100% occupancy as of Q4 2024, while 17 Grade-A assets on Sheikh Zayed Road tracked by Knight Frank boast an average occupancy of 95.4%. The bulk of new supply will come from key projects including DIFC Square (5.4 million sqft), TECOM (650,000 sqft) and Aldar's new development on Sheikh Zayed Road (88,000 sqft). OUTLOOK Generally, occupancy rates in the DIFC, Downtown Dubai, and Business Bay are currently between 95% and 99%, driven by robust tenant demand and limited new space. As a result, rents have surged significantly - rising by an average of 46% in Business Bay alone. With prime office space in Dubai's key business districts nearing full capacity, companies are exploring alternative locations for expansion. Areas such as Dubai Science Park and Expo City are attracting heightened interest, thanks to their state-of-the-art facilities and attractive rents. Adam Wynne, Partner – Head of Commercial Agency, Dubai, explained: 'Occupiers remain driven by quality and we are seeing businesses migrate outside of central Dubai to newer locations where office space is available. With prime space in Dubai's key business districts nearing full capacity, companies are finding new areas to expand into. 'Locations like Dubai Science Park and Expo City are experiencing increased interest, with occupiers drawn by state-of-the-art facilities and attractive rents.'
