According to the latest analysis by global real estate consultancy Knight Frank, office rents in the UAE’s two largest business hubs – Dubai and Abu Dhabi – remain resilient; however, demand for Grade A office space, as well as occupancy levels, are continuing to rise.
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Faisal Durrani, Partner – Head of Middle East Research, explained: “With 265,000 square feet of new office requirements during Q3, our data shows that Dubai has seen 739,000 square feet of new office demand so far this year and is on track to surpass the 1.1 million square feet of requirements we registered in 2021.”
This comes amid the widespread return of workers to offices and rising business confidence, Knight Frank said.
“The biggest challenge for the market is however a shortage of prime Grade A space. With just 2.9 million square feet due to complete between now and 2025 and with Grade A occupancy levels hovering at around 90 percent on average – even higher for some of the most sought-after buildings – occupiers entering the market or looking to expand are faced with a very limited number of options,” Durrani added.
“The severity of the shortage of new office space, combined with rising demand, particularly for high-quality offices suggests that office rents will continue to experience upward pressure,” Knight Frank highlighted.