Dubai’s office market continues to showcase robust fundamentals, driven by increasing demand, heightened occupier activity, and a significant shift in market behaviour. According to Savills’ latest report, Dubai Office Market in Minutes – Q1 2025, the emirate has entered an exciting new phase of growth, characterised by elevated rental price levels, declining vacancy rates, and intensifying competition for prime commercial space.
Dubai experienced an impressive average year-on-year office rental price growth of 45 percent across 22 sub-markets in Q1 2025. Key business districts, including DIFC, Business Bay, Downtown Dubai, and TECOM, are excelling, with occupancy rates in DIFC soaring to 98 percent. Consequently, well-located, Grade A spaces are increasingly desirable for both regional and international occupiers.
Competitive market
In addition, Dubai recorded a 4.9 percent increase in net effective occupier costs in Q1 2025, as highlighted in Savills’ global cost benchmarking report. This important metric encompasses the total cost to occupiers, including base rent, fit-out expenses, and other related costs, providing a comprehensive view of overall leasing expenditure. This rise positions Dubai among the most active and competitive prime office markets globally. Currently, the city ranks 8th worldwide for total prime office occupancy costs, averaging USD 148.90 per sq ft per annum, reflecting the emirate’s ongoing appeal as a gateway hub for the Middle East, Africa, and South Asia.
Confidence in Dubai’s long-term positioning
“This growth reflects confidence in Dubai’s long-term positioning,” stated Toby Hall, head of Commercial Agency at Savills Middle East. “Companies are looking at Dubai not just as a regional base, but as a global node for innovation, finance, and enterprise. The rise in rents and costs mirrors the demand for quality and the limited availability of premium space.”
Demand in the Dubai office market continues to be propelled by core sectors such as financial services, consulting, and technology & media, which accounted for more than half of Savills’ transactions in Q1. Additionally, smaller, agile companies are becoming increasingly active, particularly in sub-markets that offer value and accessibility, including Dubai South and Expo City.
Read more: New entrants and consolidation drive Dubai office space demand
Growing business environment welcomes new companies
The Dubai Chamber of Commerce welcomed 70,500 new companies in 2024, marking a 4.6 percent year-on-year increase and further signalling growing confidence in the business environment. As new entrants seek flexible, well-connected, and high-specification workplaces, many are turning to serviced office operators, who are expanding into community-centric and mixed-use locations.
While the supply of Grade A stock remains constrained in established districts, landlords are responding proactively by offering more tailored leasing terms, enhanced amenities, and refurbishment strategies to meet evolving occupier expectations. For example, some strata landlords in Business Bay are now quoting rents comparable to those in DIFC, illustrating the broader uplift in perceived value across sub-markets.
Lease renewals continue to be a preferred option for many businesses, particularly outside DIFC, where RERA rental protections provide added stability amidst rising costs. Occupiers are also reassessing how their space is utilized, prioritising functional layouts, optimisation, and long-term adaptability over expansive floor plans or elaborate fit-outs.
New office developments
Looking ahead, new office developments are on the horizon, with many already experiencing significant pre-commitment levels. This trend indicates sustained market confidence and suggests that competition for high-quality space will remain a central theme throughout 2025.
“Dubai’s office market is evolving, not tightening,” added Hall. “The data shows growing maturity, where rental increases reflect sustained interest, strong business fundamentals, and a shifting view of Dubai as a long-term destination for global enterprise.”
