Dubai's rapid economic growth and steady influx of new companies have led to a severe shortage of high-quality office space. This issue is especially evident in upscale areas like Downtown Dubai and the Dubai International Financial Centre (DIFC). Rental rates in these areas are rising rapidly, forcing businesses to reconsider their locations.
Despite all the construction, supply still can't keep up with demand. According to market experts, Dubai's rapid business growth and ambition to become a global business hub are the main reasons for the shortage of office space.
Competition for space and early booking
According to experts, companies are increasingly looking to lease offices while they are still under construction, fearing they will miss out on the opportunity to establish themselves in prime locations. This indicates high competition and limited supply in the premium real estate market.
In turn, investors and developers are adapting to this demand by converting residential and retail properties into office space to meet the needs of the corporate sector.
New businesses are moving beyond the city centre
Due to the shortage of space in central areas, companies are beginning to explore promising locations, such as Expo City, which gained popularity after Expo 2020. With its modern infrastructure, well-designed transportation links, and plans for sustainable development, Expo City is an attractive alternative to the crowded city center.
Additionally, businesses are turning their attention to areas such as Dubai Production City and MBR City, which offer modern facilities, convenient logistics, and more affordable rents.
Rents are rising, demand remains steady
Analysts note that occupancy rates in Grade A offices in Dubai are close to their peak. For instance, the DIFC recorded an occupancy rate of nearly 100% at the end of 2024, while the citywide rate was around 92%. Against this backdrop, rents rose by an average of 22% over the year, and growth is expected to continue in 2025.
This imbalance between supply and demand creates a favorable environment for investors. A significant amount of new office space will enter the market in the coming years, which will ease the pressure somewhat, but the shortage in key business areas will persist, continuing to push prices up.
The future of the office property market in Dubai
According to experts, Dubai is confidently moving towards becoming one of the world's largest financial and commercial hubs. However, to maintain stability and competitiveness on the global stage, the city must ensure balanced growth of its office infrastructure to meet the demands of international businesses.
Timely implementation of high-quality commercial projects and a flexible approach to tenants' needs will create a sustainable market that can accommodate both large corporations and fast-growing startups.