Top News

Dubai's office market remained resilient during the second quarter of 2026, with demand for Grade A office space continuing to outpace supply despite occupiers taking longer to make leasing decisions amid regional uncertainty, according to Savills.

The consultancy said office leasing activity continued to grow, supported by strong demand from small businesses, start-ups and companies entering the emirate, while landlords benefited from limited availability of premium office space and low vacancy levels.

Stay up to date with the latest news. Follow KT on WhatsApp Channels.

Dubai Land Department data showed 38,082 office leasing transactions were completed during the second quarter, up 4 per cent from the previous three months. The increase was driven primarily by new leases, which rose 16 per cent to 27,121 transactions, while lease renewals declined to 10,961.

Smaller office units continued to dominate the market. Offices measuring less than 500 square feet accounted for 66 per cent of all leasing activity after transactions in the segment increased 17 per cent quarter-on-quarter, reflecting sustained demand from SMEs and new business entrants attracted by Dubai's competitive business environment and relatively affordable occupancy costs.

Premium offices remain in demand

While activity among larger occupiers became more measured during the quarter, Savills said this reflected longer approval processes rather than weaker demand.

Many companies postponed relocation or expansion decisions because of regional geopolitical uncertainty, choosing instead to renew existing leases, expand selectively or opt for flexible workspace solutions. The consultancy expects many of these deferred requirements to return to the market during the second half of the year as business confidence improves.

Demand for premium office accommodation remained particularly strong.

Although Dubai Land Department figures do not include the Dubai International Financial Centre (DIFC), Savills said DIFC Square, one of the few major Grade A office developments completed this year, was substantially pre-leased before completion and continues to attract strong occupier demand.

The report also highlighted Immersive Tower, scheduled for completion in July 2027, where a significant volume of office space is already under offer, demonstrating continued appetite for future Grade A supply.

Office rents stabilise

Average office rents held steady at Dh238 per square foot during the second quarter, marking the first quarter without rental growth since the first half of 2021.

Savills said the stabilisation should not be interpreted as the beginning of a market correction. Instead, it reflects a market entering a more sustainable phase after several years of rapid rental growth, with limited Grade A supply continuing to support landlord pricing.

Toby Hall, Head of Commercial Agency at Savills Middle East.

"Following several years of exceptionally strong leasing activity and rental growth, Dubai's office market is transitioning into a more balanced phase," said Toby Hall, Head of Commercial Agency at Savills Middle East.

"While occupiers are taking more time to evaluate their options, demand for high-quality office accommodation remains resilient, particularly within the Grade A segment."

The consultancy expects leasing activity to strengthen gradually during the second half of 2026 as deferred occupier requirements return to the market.

Approximately 1.9 million square feet of office space is scheduled for delivery this year, with the development pipeline expected to exceed 4.2 million square feet by 2030. However, much of the upcoming Grade A supply is already expected to be pre-leased or absorbed by existing occupier demand, limiting its immediate impact on market conditions.

Savills expects demand to remain strongest across the financial services, technology, trading and professional services sectors, supported by Dubai's diversified economy, international business appeal and limited supply of prime office space.

Dubai off-plan office sales hit Dh13.1b in H1, surpass previous seven years combined UHNWI, entrepreneur influx deepening premium office market Dubai property market stabilises as home price declines ease