Latest news with #DubaiOfficeMarket
Khaleej Times
a day ago
- Business
- Khaleej Times
Dubai office market shows early signs of rate stabilisation
Rents for prime office spaces in Dubai have risen 36 per cent compared to last year, data showed on Monday. 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.
Arabian Business
17-06-2025
- Business
- Arabian Business
Dubai office sales hit $762m in Q1 as off-plan transactions surge 741%
Dubai's office real estate market hit record highs in Q1 2025, with investors spending AED2.8bn ($762m) across 933 transactions, according to the latest market intelligence from Cavendish Maxwell. The performance marks an 83 per cent year-on-year increase in sales value and a 24 per cent rise in transaction volume, cementing the city's position as one of the world's most dynamic business destinations. While ready office units continue to dominate the sales market, off-plan transaction values rose nearly eight-fold, up 741 per cent to AED800m ($218m), compared to AED100m ($27m) in the same quarter last year. Dubai office market Off-plan transactions accounted for 18 per cent of total sales, up from just 8 per cent in Q1 2024. Vidhi Shah, Director, Head of Commercial Valuation at Cavendish Maxwell, said: 'These record-breaking figures speak for themselves. Dubai continues to enhance its position as a global business hub and a magnet for businesses large and small. £The momentum is real: Q1 2025 saw nearly 40 per cent more foreign company registrations – including multinationals and SMEs – compared to the same time last year, reflecting ever-growing investor confidence and creating unprecedented demand for office space. 'The surge in off-plan deals can be attributed to buyer trust in upcoming developments, competitive launch prices, flexible payment plans and expectations of long-term capital appreciation. With limited existing supply and rising rental costs, a growing number of tenants are opting to buy as a strategic, long-term cost-saving measure. 'Ready offices still account for the majority of sales, but it is clear that off-plan properties are very much in demand, and we expect this trend to continue throughout 2025 and beyond.' Office sales prices increased by 24.5 per cent year-on-year and by 6.5 per cent quarter-on-quarter, with the average price reaching AED1,650 ($449) per square foot by March 2025. Rental rates followed a similar trend, rising 24 per cent annually and 6.7 per cent compared to Q4 2024, with average office rents climbing to AED160 ($43.5) per square foot. Downtown Dubai led the market in annual growth with prices rising by almost 40 per cent, followed closely by DIFC (39 per cent) and Barsha Heights (38 per cent). Limited availability of Grade A space has pushed prices higher across lower-tier office stock, with demand spilling over into B and C grade inventory. Business Bay topped the chart for transaction volume in Q1 2025, recording 316 deals, followed by Jumeirah Lakes Towers (222), Motor City (130), Barsha Heights (88), and Dubai Silicon Oasis (41). In terms of size, offices between 1,000 and 2,000sq ft were the most in demand, accounting for 48 per cent of all sales. Smaller units under 1,000sq ft made up 40 per cent, while only 2 per cent of transactions involved spaces larger than 5,000sq ft. Dubai's total office inventory reached 9.3 million square metres of gross leasable area (GLA) as of Q1 2025. An additional 215,000 sq m is expected to enter the market before the end of the year, with another 181,000 sq m scheduled for delivery in 2026. Much of the upcoming stock is located in core business districts and classified as Grade A, potentially easing supply constraints over the next two years. Vidhi Shah added: 'Much of the new supply is concentrated in core business districts, with a significant proportion in the A-grade category. 'With a strong development pipeline over the next three years, we expect the current supply-demand imbalance to narrow, bringing some relief to tenants and easing upward pressure on prices.'
Arabian Business
07-05-2025
- Business
- Arabian Business
Dubai office rents up 45 per cent
Dubai's office market continues to demonstrate strong fundamentals, with rising demand, increased occupier activity, and a dynamic shift in market behaviour, according to Savills latest Dubai Office Market in Minutes – Q1 2025. The emirate has entered a new phase of growth, characterised by elevated rental price levels, reduced vacancy, and increasing competition for prime commercial space, said Savills. Dubai saw average year-on-year office rental price growth of 45 per cent across 22 sub-markets in Q1 2025. Dubai office market Key business districts such as DIFC, Business Bay, Downtown Dubai, and TECOM are performing particularly well, with occupancy rates in DIFC reaching 98 per cent. As a result, well-located, Grade A spaces are increasingly sought after by both regional and international occupiers. In parallel, Dubai recorded a 4.9 per cent rise in net effective occupier costs in Q1 2025, as outlined in Savills global cost benchmarking report. This metric captures the total cost to occupiers, including base rent, fit out expenses, and other related costs, offering a more comprehensive view of overall leasing expenditure. The increase places Dubai among the most active and competitive prime office markets globally. The city now ranks eighth globally for total prime office occupancy costs, averaging $148.9 per sq ft per annum, a reflection of the emirate's continued appeal as a gateway hub for the Middle East, Africa, and South Asia. Toby Hall, Head of Commercial Agency at Savills Middle East, said: 'This growth reflects confidence in Dubai's long-term positioning. 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 continues to be driven by core sectors such as financial services, consulting, and technology and media, which accounted for more than half of Savills transactions in Q1. Smaller, agile companies are also increasingly active, particularly in sub-markets offering value and accessibility, including Dubai South and Expo City. The Dubai Chamber of Commerce welcomed 70,500 new companies in 2024, marking a 4.6 per cent increase year-on-year and further signalling growing confidence in the business environment. As new entrants look for flexible, well-connected, and high-specification workplaces, many are turning to serviced office operators, who continue to expand into community-centric and mixed-use locations. While supply of Grade A stock remains tight in established districts, landlords are responding proactively, offering more tailored leasing terms, enhanced amenities, and refurbishment strategies to meet evolving occupier expectations. Some strata landlords in Business Bay, for instance, are now quoting rents comparable to DIFC, underscoring the broader uplift in perceived value across sub-markets. Lease renewals remain a preferred option for many businesses, particularly outside DIFC, where RERA rental protections provide added stability in a rising cost environment. Occupiers are also reviewing how space is used, prioritising functional layouts, optimisation, and long-term adaptability over expansive floorplates or elaborate fit-outs. Looking ahead, new office developments are in the pipeline, although most are already seeing significant pre-commitment levels. This indicates continued market confidence and suggests that competition for high-quality space will remain a key theme through 2025. Hall said: 'Dubai's office market is evolving, not tightening. 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.'
Zawya
06-05-2025
- Business
- Zawya
Dubai Office Market enters a new growth phase as prime space demand intensifies: Savills
Dubai's office market continues to demonstrate strong fundamentals, with rising demand, increased occupier activity, and a dynamic shift in market behaviour. According to Savills latest Dubai Office Market in Minutes – Q1 2025, the emirate has entered a new phase of growth, characterised by elevated rental price levels, reduced vacancy, and increasing competition for prime commercial space. Dubai saw average year-on-year office rental price growth of 45% across 22 sub-markets in Q1 2025. Key business districts such as DIFC, Business Bay, Downtown Dubai, and TECOM are performing particularly well, with occupancy rates in DIFC reaching 98%. As a result, well-located, Grade A spaces are increasingly sought after by both regional and international occupiers. In parallel, Dubai recorded a 4.9% rise in net effective occupier costs in Q1 2025, as outlined in Savills global cost benchmarking report. This metric captures the total cost to occupiers, including base rent, fit out expenses, and other related costs, offering a more comprehensive view of overall leasing expenditure. The increase places Dubai among the most active and competitive prime office markets globally. The city now ranks 8th globally for total prime office occupancy costs, averaging USD 148.90 per sq ft per annum, a reflection of the emirate's continued appeal as a gateway hub for the Middle East, Africa, and South Asia. 'This growth reflects confidence in Dubai's long-term positioning,' said 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 continues to be driven by core sectors such as financial services, consulting, and technology & media, which accounted for more than half of Savills transactions in Q1. Smaller, agile companies are also increasingly active, particularly in sub-markets offering value and accessibility, including Dubai South and Expo City. The Dubai Chamber of Commerce welcomed 70,500 new companies in 2024, marking a 4.6% increase year-on-year and further signalling growing confidence in the business environment. As new entrants look for flexible, well-connected, and high-specification workplaces, many are turning to serviced office operators, who continue to expand into community-centric and mixed-use locations. While supply of Grade A stock remains tight in established districts, landlords are responding proactively, offering more tailored leasing terms, enhanced amenities, and refurbishment strategies to meet evolving occupier expectations. Some strata landlords in Business Bay, for instance, are now quoting rents comparable to DIFC, underscoring the broader uplift in perceived value across sub-markets. Lease renewals remain a preferred option for many businesses, particularly outside DIFC, where RERA rental protections provide added stability in a rising cost environment. Occupiers are also reviewing how space is used, prioritising functional layouts, optimisation, and long-term adaptability over expansive floorplates or elaborate fit-outs. Looking ahead, new office developments are in the pipeline, although most are already seeing significant pre-commitment levels. This indicates continued market confidence and suggests that competition for high-quality space will remain a key theme through 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.'
