A surge of new office developments is taking shape in Dubai and Abu Dhabi, fueled by rising demand and record occupancy rates. In Dubai alone, 83 office sales surpassing AED10 million ($2.7 million) were completed in the first half of 2025, marking a 207 percent increase over the 27 transactions noted in H1 2024, according to the Dubai Office Market Review by global property consultancy Knight Frank.
Downtown continues to dominate Dubai’s office sales market, with average prices surpassing AED5,000 per square foot in H1 2025, significantly outpacing all other submarkets. Business Bay, which has experienced a 21.2 percent growth since 2020, maintained its position as the second most expensive submarket, with average prices exceeding AED2,000 per square foot for the first time in H1.
Rise in off-plan sales
Off-plan sales—a crucial indicator of a healthy market—have also been on the rise. Largely concentrated in Business Bay, which is set to deliver over 1.3 million square feet of office space through this model, this surge underscores the strength of investor confidence in acquiring office assets within the city’s prime financial hub.
In the leasing market, with an average of AED400 per square foot for fitted offices, DIFC remains Dubai’s most expensive office location. Nonetheless, substantial rental growth has been observed in other established submarkets, including The Greens (AED260 per square foot), Dubai Design District (AED280 per square foot), and Business Bay (AED251 per square foot).
The business services sector continues to be the main driver of office requirements across Dubai, accounting for 38 percent of total demand in H1 2025, followed by the tech sector (31 percent), real estate (12 percent), and banking and finance (10 percent).
Faisal Durrani, partner and head of Research, MENA, stated: “Confidence in Dubai as a global business hub remains exceptionally strong. Indeed, this is reflected in record low vacancy rates for Grade A stock across the city, which stands in sharp contrast to many other global gateway cities.
Record high-value transactions
The technology and trading systems sector has emerged as a major driver of demand, while sustained activity from financial, real estate, and business consulting firms underscores the city’s appeal to a diverse range of global occupiers. Developers are moving quickly to capitalize on current demand, with a further 25.2 million square feet expected by 2030, when we forecast the total office stock in the city to approach 148 million square feet.
“The confidence in the office sector is further evidenced by the boom in high-value transactions, with the number of office sales over AED10 million setting a record of 83 sales in H1 2025.”
In another indicator of rising demand, DIFC reported its busiest H1 period on record for new company registrations since its inception in September 2004. A total of 1,081 new registrations from January to June has increased the total number of active companies in the center to 7,700.
Notably, there has been a rise in insurance firms establishing offices in DIFC, which now hosts 135 insurance-related businesses. The number of banking and capital markets entities operating in DIFC rose to 289 by the end of H1 2025, while the number of wealth and asset management firms climbed to 440 over the same period, representing year-on-year increases of 17 percent and 18.9 percent, respectively.
Adam Wynne, partner and head of Commercial Agency, UAE, remarked: “Market dynamics are driving a clear trend towards consolidation and rightsizing. With existing Grade A space effectively full, large corporations are leveraging the new development pipeline to consolidate their regional operations into more efficient and higher-quality headquarters. Strong demand from single occupiers for entire floors or buildings within the upcoming supply in hubs like DIFC and Business Bay points to this strategic move, as global HQs seek modern buildings that align with corporate mandates.”
Projected office supply growth
Office supply in Dubai is projected to expand by 15.8 million square feet, with Knight Frank anticipating the total gross leasable area in the emirate will reach 137.8 million square feet by 2030. This development pipeline is heavily concentrated in DIFC, which is expected to add over 7 million square feet of build-to-rent office space between 2025 and 2030. Business Bay is also a crucial growth area, with build-to-sell schemes forming a core aspect of its future supply, highlighting strong investor confidence in this submarket.
Wynne stated: “In response to near-total occupancy in prime buildings, a significant wave of new supply is on the horizon. We are tracking more than 8 million square feet of new office space due to be delivered by 2028, with much of this space being sold off-plan before completion, a notable change from historic trends.”
Knight Frank’s Abu Dhabi Office Market Review for H1 2025 reported over 5 million square feet of office requirements in the first half of the year, marking a 110 percent increase compared to H1 2024. Similar to Dubai, the business services sector is the largest demand driver, accounting for 32 percent of the total, followed by government entities at 9 percent.
Durrani remarked: “New rental contracts in Abu Dhabi have been a primary driver of market activity this year, with transaction volumes experiencing a significant peak in January, signaling fresh demand and business expansion in the UAE capital. Mirroring Dubai, with occupancy levels at record highs across Grade A stock, limited availability is driving up rents for best-in-class space.”
Read more: Dubai real estate market hits record high in Q2 2025 with 37,000 off-plan transactions
Record rental growth
Musaffah recorded the most significant quarter-on-quarter rental growth in Q2 2025 (73 percent), followed by Al Bateen (68 percent) and Al Hisn (19 percent). This was counterbalanced by more established districts like Al Danah (-2 percent) and Al Nahyan (-7 percent), experiencing minor rental corrections in Q2, partly due to a higher concentration of older secondary stock.
James Hodgetts, partner and head of Occupier Strategy & Solutions, MEA, commented: “There is good news on the horizon, with a strong pipeline of high-quality developments poised to be welcome additions to the Abu Dhabi office market. This new supply is likely to help ease current constraints, offering occupiers greater choice and setting new benchmarks for quality, sustainability, and design.”
Imminent completions include Aldar’s HB Tower in Yas Island (238,647 square feet) and the Saas Business Tower on Al Reem Island (129,210 square feet). Both developments provide the flagship, Grade A space that will appeal to international and domestic corporate occupiers.
Shehzad Jamal, partner and head of Strategy and Consultancy, MENA, stated: “Demand is expected to remain robust and will likely continue to outpace the delivery of new premium supply for the remainder of the year, fueling further rental growth in the prime segment across Dubai and Abu Dhabi. Pre-leasing activity for the landmark projects scheduled for 2026-2028 will be a key indicator of market sentiment. We expect the performance gap between Grade A, well-located assets and older, secondary stock to widen further as the flight-to-quality trend intensifies in the short term.”
Strong market momentum
Further reinforcing this buoyant outlook, recent market data from Cavendish Maxwell highlights that Dubai’s office market maintained strong momentum in Q1 2025, with around 900 office transactions completed—a 23.7 percent increase year-on-year—and total transaction values soaring by 83.1 percent to approximately AED2.8 billion. Off-plan transactions surged, constituting nearly 19 percent of all office deals for the quarter, a sharp rise from 8.1 percent the previous year, demonstrating growing confidence in future developments. Additionally, rental rates in Dubai increased by 24 percent year-on-year, fueled by tight supply and sustained demand, particularly for Grade A offices. The total office gross leasable area in Dubai reached about 9.29 million square meters, with further supply expected to moderate demand pressures by late 2025 and into 2026. These trends underscore Dubai’s strategic position as a resilient and globally connected commercial hub supported by government initiatives and infrastructure investments. The Dubai International Chamber attributed much of this growth to a 39 percent increase in new foreign company registrations, signaling ongoing international confidence in the emirate’s business environment.
This optimistic picture is complemented by the reported record-breaking performance of Dubai’s real estate market in the first half of 2025, where total transaction values across all asset types exceeded AED431 billion, a 25 percent rise compared to the previous year, highlighting the broader investment surge underpinning the office sector’s expansion.
