Dubai's Office Market Rebounds for Investors

Dubai's Office Market Attracts Individual Investors Again

In recent years, Dubai's real estate market has primarily focused on residential properties, but now the commercial sector has gained new momentum. Developers are once again opening up to individual investors and are offering off-plan, meaning pre-sale phase office spaces for sale. This shift well reflects the revival of investor confidence in the city's office market, fueled by rising demand and shrinking supply.

Individual Ownership Back in Style

Previously, especially before 2010, it was common for entire office buildings to be sold off-plan in Dubai. Later, the emphasis shifted to leasing, with most developers retaining the buildings in their ownership to lease them exclusively to companies. Now, however, we are witnessing another shift: controversial strategies already proven in residential properties have appeared in the office market, namely unit-by-unit sales.

The greatest interest is shown in peripheral areas such as Arjan or Motor City, where small and medium enterprises (SMEs) also have more affordable options. Although this does not solve the shortage of premium, institutionally owned Grade A office spaces, it is nonetheless an important step towards a diversified offering.

The Numbers Don't Lie

According to data from developers and consulting firms, Dubai's office market has stabilized. Grade A office occupancy currently hovers around 92–95%, suggesting strong confidence from both tenants and investors. As a result, average office rental rates have also increased: in the first quarter of 2025, they rose by 14.2%, with an annual average growth reaching 22%. The average rental price currently stands at approximately 190 dirhams per square foot.

On the supply side, however, demand is not being matched. By 2025, only 0.89 million square feet of new office space is expected to be delivered, while for the 2026-2027 period, 6.4 million square feet of development is underway, typically around the DIFC, One Central, Sheikh Zayed Road, and Dubai Design District (D3) areas.

What Motivates Developers?

The off-plan sales model serves not only demand but also developers' financial goals. Successful pre-sales allow for faster recoupment of invested capital, so these types of projects promise significant returns. This is especially worthwhile if developers can achieve competitive pricing during sales.

Meanwhile, the leasing side has also strengthened: along with the rise in rental rates, property owners have significantly raised offered prices, increasing the gap between tenants’ expectations and market prices.

Outlook and Challenges

Dubai's office market is currently in a strengthening cycle. The relaunch of strata sales offers more opportunities for individual investors and small businesses; however, the premium-quality Grade A supply preferred by large tenants remains tight. Developments in the coming years will play a decisive role in rebalancing demand and supply.

The current environment is favorable for those thinking about office investments in Dubai—particularly for those willing to invest in an off-plan project in time and take advantage of the opportunities offered by market dynamics.

(Source of the article is based on Dubai developers' statements.)