The Dubai office market is showing signs of rental stabilization after a period of steady growth, with demand shifting towards larger office spaces, according to the latest report from Savills for Q2 2025.
Rent trends slow
While prime office rents remain 36% higher than a year ago, the report reveals that 11 of 23 submarkets saw no change in rents during the quarter.
This contrasts with the continuous rental increases seen in 2024 and suggests that some occupiers are adopting a cautious approach, awaiting new developments before committing.
Rising demand for larger offices
Data from Savills shows a clear preference for bigger office spaces. In Q2 2025, 44% of leasing enquiries were for offices sized between 10,000 and 20,000 sq ft, compared to 38% for spaces below 10,000 sq ft. This reflects both new companies entering Dubai and existing firms expanding their regional operations.
Toby Hall, Head of Commercial Agency at Savills Middle East, said, “We’re seeing clear evidence that businesses continue to commit to Dubai, with larger footprint requirements becoming more common. Despite global economic headwinds, the city remains an attractive hub, supported by a strong pipeline of international companies establishing or growing their regional operations here.”
Market balance and future supply
Rachael Kennerley, Director of Research at Savills Middle East, added, “The stabilisation of rents in several submarkets suggests the market is entering a more balanced phase. While core areas remain in high demand, we’re now seeing occupiers adopt more considered strategies, including securing future space in advance or exploring emerging locations with better affordability.”
The report also notes that developers traditionally focused on residential projects are now exploring strata office developments. This trend could diversify ownership models and expand office options beyond Dubai’s central business districts, supporting the city’s 2040 Urban Master Plan to decentralize commercial activity.
Strategic leasing approaches
In response to recent rental increases, many tenants are securing rights of first refusal on additional space within their current buildings, allowing flexibility to expand without renegotiating leases.
Looking ahead, Savills expects demand to grow in areas such as Dubai South and Expo City, driven by availability of larger offices, more competitive rents, and enhanced transport connections.
tanvir@dubainewsweek.com
