Abu Dhabi’s Grade A office market recorded sharp rental increases in Q2 2025, driven by tight supply and rising demand from international businesses, according to Savills’ latest Market in Minutes report.
Strong rental growth
The Central Business District (CBD) saw a 42% year-on-year rise in rental rates, while outer CBD areas recorded an 18% increase.
Premium properties such as City Gate Tower and Abu Dhabi Global Market (ADGM) experienced annual rental hikes of 43% and 30%, respectively. Within ADGM, current rents range between Dhs 2,800 and Dhs 3,500 per square metre per year.
Occupier activity in the first half of 2025 was led by firms in banking, financial services, consulting, technology, and hedge funds. Demand is growing for larger office units, particularly those between 10,000 and 20,000 square feet.
Business confidence rising
Abu Dhabi’s non-oil economy grew by 6.1% year-on-year in Q1 2025 and now contributes over 56% of the emirate’s GDP, highlighting the success of government diversification efforts.
“Abu Dhabi continues to attract a diverse mix of regional and international occupiers, and the recent expansion of ADGM into Al Reem Island has only amplified that appeal,” said Stephen Forbes, Head of Abu Dhabi at Savills Middle East. “As more global firms establish a presence in the capital, we’re seeing a clear shift toward larger, high-quality spaces. Demand remains strong, particularly across financial services, consulting, and tech, a sign of growing business confidence and Abu Dhabi’s rising stature as a global commercial hub.”
ADGM expansion fuels demand
ADGM completed its expansion to Al Reem Island in Q1 2025, adding nearly 500,000 square metres of new office space. By the end of the quarter, the number of operational firms within ADGM rose by 43% year-on-year to 2,781, with financial services entities growing by 26%. Al Maryah Island’s workforce has also grown by 17%, now exceeding 29,000 employees.
Limited supply ahead
Only around 100,000 sqm of new office space is expected to be delivered in 2025, including developments in Masdar City Square and Yas Place. High pre-leasing activity at these projects signals continued strong demand. Another 100,000 sqm is set for delivery by 2027 through projects such as One Maryah Place and Saadiyat Business Park.
Savills forecasts further upward pressure on prime office rents through the rest of 2025 as demand remains high and new supply remains limited.
tanvir@dubainewsweek.com
