Dubai’s office market is experiencing a remarkable upswing, with average lease rates across key submarkets rising by 9.1% in the second half of 2024, according to Knight Frank’s H2 2024 Dubai Office Market Review.
The report highlights Trade Center District as the standout performer, recording an astonishing 96% rental growth.
Demand Significantly Outpacing Supply
“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,” explains Faisal Durrani, Partner – Head of Research, MENA.
This situation creates a striking contrast between Dubai and global office markets. Durrani notes, “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 the pre-global financial crisis. Indeed, prime rates in the DIFC are still about 50% below 2009 levels.”
64% Increase in Office Space Requirements
Knight Frank recorded 1.28 million square feet of new office space demand during 2024, representing a 64% increase compared to 2023. The demand is primarily driven by:
- Business services sector: 23% of total requirements
- Real estate sector: 23% of total requirements
- Banking and finance: 20% of total requirements
These three sectors collectively account for 843,111 square feet of new demand.
Near-Perfect Occupancy Rates
The current market is characterised by exceptionally high occupancy rates:
- DIFC: Nearly 100% occupancy
- Sheikh Zayed Road (17 Grade-A assets): 95.4% average occupancy
- Downtown Dubai and Business Bay: 95-99% occupancy
These high occupancy rates have driven significant rent increases, with Business Bay experiencing an average rise of 46%.
Future Supply Pipeline
The property consultant forecasts that Dubai’s prime office supply will reach approximately 8.2 million square feet between 2025 and 2028. This represents an 86% increase compared to the 4.4 million square feet delivered between 2021 and 2024.
Major upcoming developments include:
- DIFC Square: 5.4 million square feet
- TECOM: 650,000 square feet
- Aldar’s new development on Sheikh Zayed Road: 88,000 square feet (featuring a Grade A office tower with a luxury boutique hotel and branded residences)
Businesses Looking Beyond Central Dubai
With central Dubai’s prime office space nearing capacity, businesses are actively exploring alternative locations.
Adam Wynne, Partner – Head of Commercial Agency, Dubai, explains: “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.”
Areas gaining increased attention include:
- Dubai Science Park
- Expo City
These emerging business hubs are attracting interest due to their contemporary facilities and competitive rental rates.
Key Takeaway
Dubai’s office market is experiencing unprecedented growth with demand significantly outstripping supply, driving rent increases across all prime locations. As central business districts reach full capacity, forward-thinking companies are exploring emerging areas that offer quality space and competitive rates. This trend is expected to continue through 2025-2028 as new supply gradually enters the market.
JobXDubai 
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