Staff Report
Dubai, UAE
Approximately a million square feet of office space in Dubai is projected to be delivered in 2025 and early 2026 – reflecting persistent demand for office leasing underpinned by the increasing number of businesses being set up in the emirate. Over 19,000 business licenses under the Dubai Chamber of Commerce were issued in the first quarter of 2025, exhibiting 17.6 percent yearly growth. Policies like complete foreign ownership of onshore companies, reduced costs for establishing businesses, visa and citizenship reforms, and job-security measures have factored in the UAE’s appeal for investors and talent, Savills, a real estate services provider, said in its latest report on Dubai office market Q2 2025.
Findings in Savills’ study indicate a shift from last year’s pattern 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.
Average prime office rents remain 36 percent higher year-on-year; however, Savills noted that 11 of the 23 submarkets saw no quarterly change in rents, a contrast to last year’s steady and constant growth. Stability was recorded across areas like Bur Dubai, Garhoud, DAFZA, Downtown Dubai, and JLT, while rent increased in Dubai Silicon Oasis, Barsha Heights, Business Bay, and Studio City. This points to a more cautious approach by some occupiers as they wait for new developments to be delivered before committing to commercial space.
Rachael Kennerley, Director of Research at Savills Middle East, said, “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.”
Savills Middle East data also showed a clear shift in demand towards bigger spaces. In Q2 2025, 44 percent of leasing enquiries were for offices between 10,000 and 20,000 square feet, reflecting a move by new entrants and existing firms looking to expand their operations. By comparison, spaces below 10,000 square feet accounted for 38 percent of total demand.
Although about one million square feet of space is anticipated to be added to the existing supply, Savills reported that supply constraint is likely to ease not at handover but once existing occupiers relocate, releasing older stock to the market. Key projects include Wasl Tower, Immersive Tower and DIFC Square from DIFC, Sweid One from Sweid & Sweid, Uptown Towers in JLT, and Capital One in JVC among others.
In another shift from previous years, residential developers are now exploring strata office developments, which could bring more diversified ownership models and broaden the office landscape beyond the usual central business districts. Savills noted that the shift 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.
According to Savills, demand is projected 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.
Ends
Also read: Dubai realty transactions surge 40% to Dh326.7 billion in H1 2025
