Office Rent Stabilization in Dubai Amidst Demand for Larger Spaces

Dubai's office market is experiencing a shift, according to Savills' Q2 2025 report. While demand remains robust, particularly for larger spaces, rental growth has stalled in many areas after months of continuous increases. Eleven out of 23 submarkets saw no rental increases in the last quarter, a significant change from 2024. Despite this, average prime office rents are still up 36% year-on-year, reflecting the market's previous strong performance.

A key trend is the growing demand for larger office spaces, with nearly half of leasing inquiries in Q2 targeting spaces between 10,000 and 20,000 sq ft. This is driven by new businesses entering the market and existing companies expanding their operations in Dubai. Simultaneously, businesses are becoming more cautious in core districts like Downtown Dubai and DIFC, with many delaying lease commitments while awaiting new office supply.

The report highlights emerging trends, including residential developers entering the office market through strata developments, expanding the commercial property landscape. Businesses are also securing rights of first refusal on additional space in their current buildings, offering flexibility for future growth.

Looking ahead, areas like Dubai South and Expo City are expected to attract increased interest, offering larger spaces, competitive rents, and improved transport links aligned with Dubai's 2040 plan for a more decentralized city.