2 days ago
Abu Dhabi's office market stays vibrant on record rent, demand surge
Marked by record-high rental rates and soaring demand for Grade A space, Abu Dhabi's office property sector is witnessing a powerful surge in growth.
According to the Q2 2025 Market in Minutes report by global real estate advisor Savills, the emirate's continued economic diversification, robust business sentiment, and limited supply have combined to create a highly competitive leasing environment, particularly within premium commercial zones.
The Central Business District (CBD) recorded an exceptional 42 per cent year-on-year increase in rental rates in the second quarter, driven by rising demand and near full occupancy in flagship buildings. Outer CBD areas also saw strong growth, with rents increasing by 18 per cent during the same period. Notable commercial towers such as City Gate Tower and Abu Dhabi Global Market (ADGM) experienced annual rental hikes of 43 per cent and 30 per cent respectively, underscoring the appetite for top-tier commercial spaces.
Within ADGM, where the financial free zone has solidified its reputation as a magnet for global firms, rents now range between Dh2,800 and Dh3,500 per square metre annually. Leasing momentum was further buoyed by ADGM's jurisdictional expansion into Al Reem Island in Q1 2025, which added nearly 500,000 square metres of commercial space. As a result, the number of licensed firms operating within ADGM surged 43 per cent year-on-year to reach 2,781 by the end of Q1, while the financial services sector alone grew by 26 per cent.
This boom in occupancy and business activity has also translated into a workforce expansion on Al Maryah Island, where the number of employees has exceeded 29,000 — up 17 per cent from the previous year.
Stephen Forbes, head of Abu Dhabi at Savills Middle East, attributed the market's strength to the emirate's rising appeal as a global commercial destination. 'Abu Dhabi continues to attract a diverse mix of regional and international occupiers, and the recent expansion of ADGM into Al Reem Island has only amplified that appeal. As more global firms establish a presence in the capital, we're seeing a clear shift toward larger, high-quality spaces,' he said.
In the first half of 2025, the primary drivers of leasing activity were firms in banking, financial services, insurance (BFSI), consulting, technology, and hedge funds. There has been an increasing number of requirements for large office units ranging between 10,000 and 20,000 square feet, reflecting the city's growing role as a regional headquarters for global enterprises.
Despite the strong demand, new office supply remains relatively constrained. Only about 100,000 square metres of commercial space is expected to be delivered in 2025, with new inventory primarily coming from projects such as Masdar City Square and Yas Place. However, these projects are already witnessing high levels of pre-leasing, indicating the strength of underlying demand. Another 100,000 square metres of space is projected to come online by 2027 from developments like One Maryah Place and Saadiyat Business Park.
Savills anticipates that the sustained mismatch between demand and supply will continue to put upward pressure on prime office rents throughout the rest of the year. The advisory also noted that Abu Dhabi's position as a stable and transparent market with strong regulatory frameworks has been instrumental in attracting global investors and occupiers.
This sentiment is echoed in the findings of dubizzle's H1 2025 Abu Dhabi Property Sales Market report, which identifies the emirate as one of the region's most attractive real estate investment destinations. Accelerating transaction values across affordable, mid-tier, and luxury residential segments have been driven by a combination of rising prices, investor appetite, and growing confidence in Abu Dhabi's long-term urban vision.
The launch of digital property platforms like Madhmoun, aimed at improving transparency and ease of transaction, as well as landmark developments such as the upcoming Disneyland on Yas Island, have added to the city's investment appeal. These efforts are further supported by large-scale infrastructure projects that enhance connectivity and accessibility, positioning Abu Dhabi as a competitive alternative to more saturated regional markets.
Overall, the strength of Abu Dhabi's office sector reflects broader macroeconomic trends. The emirate's non-oil economy grew by 6.1 per cent year-on-year in the first quarter of 2025, now contributing over 56 per cent to total GDP. This transformation, part of Abu Dhabi's Vision 2030 strategy to diversify away from hydrocarbons, is translating into sustained investor confidence and a vibrant, forward-looking commercial landscape.
Property market analysts predict that with limited new supply, high pre-leasing activity, and a steady influx of international firms, Abu Dhabi's office market is poised for continued growth.
