Dubai office market cools after years of rent gains

2026 is shaping up to be a year of repositioning rather than a scramble for space in Dubai’s office market. A slowdown in rental growth and new stock set to come online this year will likely open up pockets of relief in an otherwise tight market, according to reports from Savills (pdf) and Knight Frank (pdf).

Prices are already easing: Average rents held steady q-o-q at around AED 238 per sq ft, marking the first real pause since mid-2021, but were still up 14% y-o-y. Savills attributes this to a mix of the usual Ramadan slowdown putting the brakes on an otherwise active start to the year and the regional war weighing on decision-making.

New supply set to change tenant tactics: Around 2 mn sq ft is due to come online this year, followed by 1.6 mn sq ft next year, Savills said. Jump ahead and Knight Frank sees 23.4 mn sq ft becoming available by 2030, if the conflict doesn’t put a spanner in the works, that is.

BUT- We’ll have to wait and see what actually gets delivered, with new unit completions often historically lagging behind in the office sector. The sector logged a 39% delivery rate last year.

As stock is delivered, tenant tactics are likely to pivot away from snapping up whatever’s available and renewing contracts to being more selective as pockets of space open up here and there. Last year was marked by a supply crunch and skyrocketing demand, leading to a 25.9% uptick in sales prices.

It’s really a question of where: Both Savills and Knight Frank flag incoming stock as being concentrated in core districts such as Business Bay and Dubai International Financial Center. That sets up a more fragmented landscape, with some submarkets set to absorb new stock smoothly, while others keep seeing pressure on pricing and occupancy.

ICYMI- As we’ve previously reported, DIFC is set for a AED 100 bn expansion, with 17.7 mn sq ft of space set to open between 2030 and 2040.

The trend: The leasing market is being dominated by smaller footprint requirements, with 97% of leasing transactions coming in at below 3k sq ft in 1Q, according to Savills. Tenants were looking more toward ready-to-move units, with strata spaces proving more popular than Grade A buildings.

Our take? 2026 is emerging as a year where the market is no longer driven by scarcity alone. Tenants are gaining more leverage through choice, while landlords may compete more on readiness and location practicality.