The report, from commercial real estate outfit Cluttons, says that the office space market in Dubai has seen a ‘healthy increase’ of late.
A fall in office rents is partly to blame for the rise in demand, according to the report, with some districts of the city seeing rents fall by 7 to 30 per cent.
The report stated: “Dubai is still viewed as an important and strategic location for businesses to have a presence. With the city becoming affordable, this is a good time for foreign companies to establish themselves within Dubai.”
However, the report did add that while some districts have seen a drop in rents, others such as DIFC, Sheikh Zayed Road, Tecom and Emaar Square have rents from AED 100 to AED 250 per square foot.
The report added: “Prices have held steady in more prestigious office locations…This is an encouraging sign that the market is in recovery mode.
“However, overall, the market still shows a trend of downward pressure on rents that was seen throughout 2010, caused by the oversupply of new office stock.”
Overall vacancy levels in Dubai stand at approximately 40 per cent.
The Dubai market will be ‘driven to a higher level of maturity’ in the future by landlords offering longer leases and large rent-free periods according to Cluttons.
Meanwhile, Dubai has announced plans to reduce its energy consumption by 30 per cent over the next two years. The city is aiming to become the lowest carbon economy in the region, a state official said recently.
The comments came at the recently concluded Dubai Global Energy Forum.
Editor’s notes: In Q1 2023, rental levels had increased year-on-year in the majority of districts. Most notably in One Central, Business Bay, JLT, Deira, DIFC, Dubai Investment Park, Dubai Production City, Dubai South and Al Barsha Heights. In fact, the only location that hadn’t shown an increase was Dubai Design District, which remained stable.
In 2022, the Dubai International Financial Centre (DIFC) became the 16th most expensive location in the world in which to rent office space, at USD 103 per square foot per year (gross; net effective rent plus additional occupancy costs).
In Savills’ Global Occupier Markets: Prime Office Costs – Q4 2025 report, Dubai was found to be the 8th most expensive location in the world to rent office space, with a net effective rent equivalent of USD 166.10 per square foot per year. This research was conducted before the 2026 Middle Eastern disruption.
Savills also reported in April 2026 that leasing activity had been strong in January and February, but it slowed with the arrival of Ramadan and the military events in March.
Overall average office rents remained stable at AED 238 per square foot per year compared to the previous quarter; however, this was up 14 per cent from the previous year.
It was found that 97 per cent of activity was transactions of below 3,000 square feet, reflecting demand from new business occupiers in the market.
Following a period of limited supply, approximately 2 million square feet of space was expected to be delivered in 2026, with further supply in 2027, which was likely to reduce upward pressure on rents.