Due to rising demand from both investors and occupiers, Dubai’s commercial real estate market is about to enter a significant new growth phase.
The future for Grade A and logistics-led space has never been better, average office rents are rising, and occupancy is still close to record highs, according to new analysis from Chestertons Mena.
According to Chestertons’ most recent research, there is a persistent need for high-end offices, particularly in key locations like DIFC, Business Bay, and Dubai Internet City. Because of their infrastructure, prominence, and closeness to global corporate activity, these areas continue to attract the greatest interest. According to the company, the scarcity of Grade A space has contributed to occupancy levels reaching almost 95%, with citywide office occupancy approaching 92%.
Rent has increased sharply as a result of the spike in demand. According to Chestertons’ research (based on Q1 trends), typical office leases in Dubai are approximately Dh 190 per square foot, a 22% rise from the previous year. A wave of professional services organizations, international relocations, and growing regulated-sector corporations are contributing to this gain.
Micro-markets that are smaller or more recent are also gaining traction. According to Chestertons, tech businesses, digital media operators, and e-commerce players are making leasing inquiries in neighborhoods including Jumeirah Lakes Towers (JLT), Barsha Heights, Dubai South, Mohammed bin Rashid City, and Dubai Harbour. These locations attract tenants not only because of their affordable prices but also because of their great infrastructure connectivity and expandable layouts.
In Dubai, workplace tastes are changing quickly. The trend to hybrid working patterns is reflected in the increasing demand, according to Chestertons researchers, for turnkey, equipped offices with flexible leases. In response, landlords are providing plug-and-play fixtures, shorter lease agreements, and smart office spaces. Additionally, wellness is becoming more and more important; contemporary business buildings now prioritize natural light, biophilic design, high-quality air filtration, outdoor breakout spaces, gyms, and cafés. Expect amenities like digital room booking systems and high-definition video conferencing, as technology is also being integrated into these places.
The appetite of investors has also increased. According to Chestertons, Grade A commercial properties are especially appealing to long-term investors because of their high occupancy profile, supply limitations, and outstanding rental performance. According to the company’s projection, rental stability will be sustained for a very long time due to the limited availability of high-spec space.
In fact, supplies is still limited. According to Chestertons, only over 0.89 million square feet of new office space will be finished in 2025; by 2026 and 2027, that number is expected to rise to nearly 4.1 million square feet and 2.3 million square feet, respectively. However, according to Chestertons’ estimates, a large portion of that pipeline may already be pre-leased or absorbed before construction, thus even that pipeline might not be sufficient.
The tight-supply theory is supported by independent real estate sources. For example, according to Cushman & Wakefield’s MarketBeat Q1 2025 report, there is already “strong pre-leasing activity” for the 0.89 million square feet of new space anticipated in 2025, which is driving up rents and occupancy. Only 770,000 square feet of new office space had really gone online by Q3 2025, according to Cushman, who also cautioned that the wider supply constraint is probably going to last until 2027.
The pattern is repeated in other real estate reports. GulfBase reports that Savills’ average rents in Dubai’s major office submarkets, such as DIFC, Business Bay, Downtown, and Tecom, increased by 45% year over year in 2025. These conclusions are corroborated by Knight Frank’s H2 2024 analysis, which noted a 9.1% increase in lease rates and a 64% year-over-year increase in office space demand, particularly from business services, real estate, and finance.
This tightness is further supported by the vacancy picture: according to specialty real estate sources, Dubai’s overall office vacancy had dropped to about 7.5% by Q3 2025, indicating fierce competition for premium space. Concurrently, gross rental yields for prime office investments are anticipated to be between 7 and 8 percent, highlighting the growing appeal of commercial real estate to long-term investors.
According to data, sales transactions increased by 18.2% year over year in February 2025 alone, totaling Dh 9.7 billion in commercial real estate agreements. Investor confidence in the sector’s long-term performance is indicated by that spike.