Dubai’s office market continued to see strong interest in high-quality workspaces during the second quarter of 2026, supported by demand from businesses, limited availability of Grade A offices and the city’s position as a major regional business centre, according to a new report by Savills.
The Dubai Office Market Report said the market is moving into a more balanced phase, with companies continuing to seek premium office spaces while maintaining a more selective approach to leasing decisions.
Leasing activity
Data from Dubai Land Department (DLD) recorded 38,082 office leasing transactions during Q2 2026, marking a 4% increase compared with the previous quarter.
Demand was particularly strong among smaller office units, with transactions below 500 sq ft rising 17% quarter-on-quarter and accounting for 66% of total leasing activity. The report said this reflects continued interest from SMEs, start-ups and new businesses entering Dubai’s market.
New lease transactions increased 16% quarter-on-quarter to 27,121, while renewals reached 10,961 during the period.
Grade A demand
Demand for premium office spaces continued to perform strongly, with Grade A developments attracting significant occupier interest.
Savills said DIFC Square, one of the major Grade A office completions this year, was substantially pre-leased before completion and has continued to see strong leasing activity. Immersive Tower, which is expected to be completed in July 2027, has also recorded significant interest, with a large portion of space already under offer.
Office rents remained stable during the quarter, with average market rents at Dhs 238 per sq ft. Savills said this reflects market stabilisation supported by limited availability of premium office space and low vacancy rates in key business areas.
Market outlook
Around 1.9 million sq ft of office space is expected to be delivered during 2026, with total upcoming supply projected to exceed 4.2 million sq ft by 2030.
Savills expects much of the future Grade A supply to be absorbed by existing demand, as businesses continue to look for high-quality office locations.
Toby Hall, Head of Commercial Agency at Savills Middle East, said, “Following several years of exceptionally strong leasing activity and rental growth, Dubai’s office market is transitioning into a more balanced phase. While occupiers are taking more time to evaluate their options, demand for high-quality office accommodation remains resilient, particularly within the Grade A segment.
As regional business confidence improves, we expect occupier requirements that were deferred during Q2 to progressively return to the market. Combined with Dubai’s strong economic fundamentals, diversified occupier base and limited availability of prime office space, this is expected to support healthy leasing activity and sustained rental resilience through the second half of the year.”
The report added that demand for high-quality offices and flexible workspaces is expected to remain strong, particularly from sectors including financial services, technology, trading and professional services.
tanvir@dubainewsweek.com
