Why Demand for Dubai’s Office Space Keeps Rising

With record-high occupancy rates, rising rents, and growing institutional interest, Dubai’s office market continues to strengthen with no signs of slowing down.

What’s Driving the Growth

**Pro-business policies and regulatory reforms**
Dubai remains one of the world’s most business-friendly hubs. Reforms, incentives for foreign investors, and the appeal of free zones such as DIFC, DWTC, and Dubai Internet City — where occupancy rates exceed 95% — continue to attract multinational corporations.

**Shift toward quality office space**
Post-pandemic, companies are prioritizing modern Grade A offices with sustainable design, flexible layouts, ESG credentials, and amenities that support hybrid work models.

**Rising capital values and rents**
Since 2021, Grade A office rents in prime areas have surged by double digits. Values are climbing in DIFC, Downtown, and Business Bay, reflecting strong demand and limited supply.

**High occupancy across prime districts**
Free zones remain near saturation, while core areas like DIFC are operating at close to full capacity. This tightness in supply is pushing tenants to secure long-term leases in advance.

**Institutional investment on the rise**
Global REITs, funds, and private equity are increasingly targeting Dubai’s office sector, bringing liquidity and raising standards for new developments.

Numbers and Projections

• Occupancy: Prime office districts are averaging above 90%, with DIFC and free zones exceeding 95%.

• Rents: Average Grade A rents have risen more than 80-100% since 2021, with the strongest increases in DIFC and Downtown.

• Supply outlook: Only a limited pipeline of new Grade A office projects is under construction, ensuring the market remains supply-constrained in the near term.

Risks to Watch

• Potential oversupply if too many new projects launch simultaneously, though current pipeline remains very limited.

• Global macroeconomic headwinds, including interest rates and geopolitical uncertainty, could dampen corporate expansion plans.

• Hybrid work and evolving workplace strategies may alter long-term demand for large office footprints.

Outlook

Despite global uncertainties, the Dubai office market is well-positioned for continued growth. Strong fundamentals, a pro-business environment, and limited new supply are driving sustained demand for prime offices. For both occupiers and investors, Dubai’s office sector offers resilience, attractive returns, and long-term opportunity.