Dubai office market shows early signs of rate stabilisation
New findings from Savills latest Dubai Office Market in Minutes report for Q2 2025 indicate a shift from last year's pattern of across-the-board rental growth, with signs that rents are beginning to level out in several submarkets. At the same time, the market continues to see strong appetite for larger office spaces and an evolving mix of future supply, marking a noticeable change from the trends observed in 2024.
The report highlights that 11 of the 23 submarkets tracked by Savills saw no quarterly change in rents, a contrast to last year's steady and constant growth. This points to a more cautious approach by some occupiers as they wait for new developments to be delivered before committing to commercial space.
Savills Middle East data also shows a clear shift in demand towards bigger spaces. In Q2 2025, 44 per cent of leasing enquiries were for offices between 10,000 and 20,000 sq ft, reflecting a move by new entrants and existing firms looking to expand their operations. By comparison, spaces below 10,000 sq ft accounted for 38 per cent of total demand.
Toby Hall, Head of Commercial Agency at Savills Middle East said: 'We're seeing clear evidence that businesses continue to commit to Dubai, with larger footprint requirements becoming more common. Despite global economic headwinds, the city remains an attractive hub, supported by a strong pipeline of international companies establishing or growing their regional operations here.'
Rachael Kennerley, Director of Research at Savills Middle East added: 'The stabilisation of rents in several submarkets suggests the market is entering a more balanced phase. While core areas remain in high demand, we're now seeing occupiers adopt more considered strategies, including securing future space in advance or exploring emerging locations with better affordability.'
In another shift from previous years, Savills has observed traditionally residential developers now exploring strata office developments, which could bring more diversified ownership models and broaden the office landscape beyond the usual central business districts. This aligns with Dubai's 2040 Urban Master Plan, which seeks to build a 20-minute city with commercial activity spread across more areas.
With recent rental rises still fresh in mind, more occupiers are now securing rights of first refusal on additional space within their existing buildings. This gives them the ability to grow as needed while maintaining the benefits of their current lease agreements.
Looking ahead, Savills expects demand to increasingly spill over into locations such as Dubai South and Expo City, supported by the availability of larger spaces, more competitive rents, and improved transport links.
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