Abu Dhabi's office market maintained tight conditions in 1H 2025, with strong demand and limited Grade A availability driving occupancy rates to record highs, according to a recent Savills report (pdf).

ADGM’s 1Q 2025 expansion to Al Reem Island added 500k sqm of premium office inventory to the market. Business activity saw a significant uptick on the back of this, with the financial freezone now housing 2.8k operational firms — a 43% increase from the previous year.

The expansion also led to an uptick in activity on Al Reem and Al Maryah islands. The completion of Saas Business Tower in 2Q delivered an additional 130k sq ft of Grade A space to Reem Island, while Al Maryah Island's workforce expanded 17% to surpass 29k professionals.

Who led the demand? Leasing demand remained concentrated in the banking, financial services, and ins. (BFSI) sector, alongside growing requirements from hedge funds, consulting firms, and tech companies. Most transactions focused on mid-sized units between 10k-20k sq ft. As Grade A shortages persisted, secondary locations — including the Corniche and Downtown areas — saw increased interest in Grade B properties.

Average rents in ADGM are now upwards of AED 3.5k per sqm, as rental growth accelerated across all submarkets. Central business district (CBD) properties recorded 42% y-o-y increases in 2Q, while rents outside CBD areas grew a more moderate 18%.

The outlook: Pre-leasing commitments from the likes of Aldar and Mubadala indicate that the office market will continue to expand, though limited Grade A availability will maintain upward pressure on rents as Abu Dhabi continues to attract corporations, family offices, and high-net-worth individuals this year.

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