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Khaleej Times
6 days ago
- Business
- Khaleej Times
Dubai office prices, rents jump by 24% in first 3 months of 2025
Dubai's office market will remain landlord-driven due to limited availability and sustained demand. According to analysts at Cavendish Maxwell, the shortage of Grade A office space is driving spillover demand, pushing prices higher in Grade B and C segments. 'Office sales prices rose 24.5 per cent year-on-year, while rental rates increased by 24 per cent, fuelled by limited availability and sustained demand, especially in Grade A accommodations. Additionally, ongoing shortages of Grade A space are driving spillover demand, pushing prices higher in the Grade B and C segments,' analysts said in the first quarter report. Dubai's office market maintained strong momentum in the first quarter of 2025 as the Dubai International Chamber reported a 39 per cent year-on-year increase in new foreign company registrations, including 11 multinational corporations and 42 SMEs. 'Dubai's office market entered 2025 with strong momentum, supported by steady economic growth, high levels of business formation, and resilient trade performance, all within a stable macroeconomic environment. This foundation is further strengthened by strategic infrastructure development, world-class connectivity, and a pro-business regulatory framework. Together, these factors have driven robust performance in the first quarter of 2025, reaffirming Dubai's status as a leading destination for regional and international capital despite ongoing geopolitical and economic uncertainties,' said analysts at Cavendish Maxwell. In the remainder of 2025, analysts see the office supply pipeline remains robust and may offer some relief to tenants. It is projected that approximately 215,000 sqm of new office space is expected to enter the market; however, actual completions are often lower than projected due to market factors, while pre-booking of units further reduces immediate availability. 'As a result, occupancy rates are expected to remain elevated throughout 2025, supported by strong and sustained demand that continues to outpace supply. Given this supply-demand dynamic, the market is expected to remain landlord-driven, with landlords maintaining significant leverage. Both sales and rental prices are projected to rise further throughout 2025, primarily due to ongoing supply constraints,' said analysts at the property consultant firm. It added that some tenants may downsize or relocate, while others might embrace flexible workspaces or pre-commit to pipeline projects. The office sales market reflected this positive sentiment, with approximately 900 transactions completed in Q1 2025, a 23.7 per cent year-on-year increase, driven by strong activity in both ready and off-plan segments. Notably, off-plan transactions surged, accounting for 18.9 per cent of all deals compared to just 8.1 per cent in Q1 2024, highlighting growing buyer confidence in future developments.
Khaleej Times
25-05-2025
- Business
- Khaleej Times
Abu Dhabi rents surge up to 12%: What is driving soaring rental prices in 2025?
Abu Dhabi's residential market has rapidly absorbed new supply over the past 18 months, driven by exceptionally high occupancy and surging demand, pushing rents up by as much as 12 per cent. Around 1,200 residential units, including 700 apartments and 500 villas, were delivered during Q1 2025 in Jubail Island, Bloom Living, and Al Raha Beach. Yet, occupancy levels remain robust, exceeding 95 per cent in many investment zones, according to Asteco. The development pipeline remains active, projecting nearly 5,500 further residential handovers by year-end, concentrated in key areas such as Yas Island, Masdar City, Saadiyat Island and Al Reem Island. A sharp rise in population, reaching 3.789 million as of September 2023, has significantly boosted demand from both tenants and buyers. "High occupancy rates were maintained across all Investment Zones, effectively absorbing the steady delivery of new supply over the past 18 months. Exemplifying this trend, newly constructed developments in areas such as Al Raha Beach report occupancy levels surpassing 95 per cent and achieving strong rental rates,' said the real estate consultancy. 'This widespread positive performance, characterised by increasing rents and high occupancy, underscores the fundamental strength and consistency of demand within Abu Dhabi's residential sector throughout the last three years,' it said. In the first quarter of 2025, average apartment rental rates increased by 4 per cent quarter-on-quarter and showed a significant 10 per cent rise year-on-year. 'Growth was particularly strong in the high-end segment, which experienced average rental increases between 8 per cent and 12 per cent. The mid-tier market also saw notable growth, with rents increasing between 5 per cent and 8 per cent, on average,' Asteco added. In the villa market, the luxury segment continued to lead rental growth, especially in prime locations such as Saadiyat and Yas Islands. Rental rates in some communities surged by as much as 15 per cent compared to last year. High-end villa communities also recorded significant gains, with average rental rates rising between 4 per cent and 7 per cent. Haider Ali Khan, CEO of Bayut, said Abu Dhabi's real estate sector in 2025 continues to build on last year's strong momentum, remaining an attractive destination for global investors. 'The influx of capital from sovereign wealth funds and the growing entrepreneurial landscape drive renewed interest in the emirate. With over 30 new projects launched, Dh7.8 billion in foreign investment recorded in 2024, and an increased focus on transactions, Abu Dhabi is establishing itself as a smart, future-ready hub for property investment,' he said. Recently, developer confidence remained evident throughout the first quarter, reflected in several significant residential projects' launches and/or announcements. With many developments encompassing residential and mixed-use components currently in the planning and early development phases, additional new project announcements are anticipated throughout 2025, said property brokerage firm Asteco.
