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Hi Dubai
7 days ago
- Business
- Hi Dubai
Dubai Office Market Shows Early Signs of Rate Stabilisation and Larger Space Demand Compared to Last Year: Savills
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. While average prime office rents remain 36% higher year-on-year, 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% 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% 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. For further insights and detailed analysis, download the full Dubai Office Market in Minutes Q2 2025 report from here. Source: Savills
Khaleej Times
21-07-2025
- 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.
Zawya
21-07-2025
- Business
- Zawya
Dubai Office Market shows early signs of rate stabilisation and larger space demand compared to last year: Savills
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. While average prime office rents remain 36% higher year-on-year, 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% 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% 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. About Savills Middle East: Savills plc is a global real estate services provider listed on the London Stock Exchange. With a presence in the Middle East for over 40 years, Savills offers an extensive range of specialist advisory, management and transactional services across the United Arab Emirates, Oman, Bahrain, Egypt, and Saudi Arabia. Expertise includes property management, residential and commercial agency services, property and business assets valuation, and investment and development advisory. Originally founded in the UK in 1855, Savills has an international network of over 700 offices and associates employing over 40,000 people across the Americas, UK, Europe, Asia Pacific, Africa, and the Middle East.
Khaleej Times
04-06-2025
- Business
- Khaleej Times
Dubai office rents soar amid tight supply, strong demand
Dubai's office market is thriving, driven by strong demand, limited supply, and a surge in rental prices, positioning the emirate as a global hub for business and innovation. According to Savills' latest Dubai Office Market report, average year-on-year rental price growth soared 45 per cent across various sub-segments in 2025, with key business districts like the Dubai International Financial Centre (DIFC), Business Bay, Downtown Dubai, and TECOM leading the charge. DIFC, in particular, boasts an impressive occupancy rate of 98 per cent, underscoring the intense competition for premium office space. The city's Grade A office spaces are in high demand from both regional and international occupiers, fueled by Dubai's strategic appeal as a gateway to the Middle East, Africa, and Asia. Savills reports a 4.9 per cent increase in net effective occupier costs in Q1 2025, encompassing base rent, fit-out expenses, and other leasing costs. This places Dubai as the eighth most expensive prime office market globally, with average costs of $148.90 per square foot per annum. 'This growth reflects confidence in Dubai's long-term positioning,' said Toby Hall, head of Commercial at Savills. 'Companies view Dubai not just as a regional base but as a global node for innovation, finance, and enterprise.' Core sectors such as financial services, consulting, and technology and media are driving demand, accounting for the majority of market transactions. However, the supply of quality office space remains critically low, with Cushman & Wakefield Core projecting an undersupply until 2027-2028. While new office supply is set to double in 2025, adding 1.66 million square feet, much of this is already pre-leased due to unrelenting demand. DIFC alone will contribute nearly one-third of the city's office supply over the next three years, with most spaces expected to be occupied before completion. Dubai's office market holds the second-highest global occupancy rate at 92 per cent, projected to exceed 94 per cent by the end of 2025. In 2024, office rents surged by 22 per cent year-on-year, with forecasts predicting an additional 10-12 per cent increase in 2025. This growth is fuelled by an influx of new businesses and foreign companies drawn to Dubai's status as a trade, tourism, and financial hub. A CBRE report highlights that the chronic undersupply of quality space in prime locations has intensified competition, pushing rental rates up by over 20 per cent annually and creating challenges for tenants during lease renewals. Despite the tight market, landlords are adapting to meet evolving occupier needs. In established districts, where Grade A stock is scarce, property owners are offering tailored leasing terms, enhanced amenities, and refurbishments to attract tenants. In Business Bay, some strata landlords are now quoting rents comparable to DIFC, reflecting a broader uplift in perceived value across sub-markets. Meanwhile, lease renewals remain a popular choice for businesses, particularly outside DIFC, where Rera rental protections provide stability in a rising cost environment. Occupiers are also prioritizing functional layouts and long-term adaptability over expansive or elaborate office designs, optimizing space usage to align with modern workplace trends. While the outlook for Dubai's office market remains robust, with strong fundamentals and sustained occupier interest, the persistent undersupply poses challenges, as new deliveries in 2025 — approximately 100,000 square metres — are unlikely to alleviate pressure significantly. Most of these spaces will be pre-leased, leaving little room for new entrants or expanding businesses.
Hi Dubai
08-05-2025
- Business
- Hi Dubai
Dubai's Office Market Enters New Growth Phase Amid Surging Demand for Prime Spaces: Savills Report
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. 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. said Toby Hall, Head of Commercial Agency at Savills Middle East. 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 signaling 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 the 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. 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. added Hall. Read the complete findings of the reports here: Dubai Office Market Q1 2025 and Global Occupier Markets: Prime Office Costs – Q1 2025 News Source: Savills Middle East
