Dubai office lease rates rise as demand outpaces supply: Average office lease rates surged 22.4% y-o-y in 1H 2024, with Grade A office occupancy soaring past 90% amid rising demand and limited supply, Khaleej Times reports, citing Knight Frank’s latest report. Office rents in the emirate’s office logged a 19% y-o-y increase during 2Q alone, the newswire cites D&B Properties as saying.

The breakdown: Dubai International Financial Centre remained the priciest area for office rentals, with average rents at AED 355 per sqft in 1H. Trade Centre District followed closely, with rents jumping 81% over the past year to AED 350 per sqft. Downtown Dubai ranks third, with rental prices 1.5x lower than those in DIFC. Other popular areas — Greens, Sheikh Zayed Road (West), and Jumeirah Lakes Towers — all saw double-digit growth, pushing rates above AED 200 per sqft.

New office demand in 1H 2024 reached some 578.4k sqft, according to head of commercial agency at Knight Frank Adam Wynne.

Total transaction values in 1H 2024 hit AED 2.7 bn, up 24% y-o-y, with Downtown Dubai leading sales prices at AED 3.6k per sqft, according to the report. Meanwhile, sales transactions increased to over 1.4k from 1.3k in the previous year.

Top-tier offices key to attracting talent: “Businesses remain laser-focussed on securing best-in-class space, not least because of the proven links between occupying Grade A offices and the ability to attract and retain the best talent,” Faisal Durrani, partner and head of Research at Mena of Knight Frank, said. “Offices have graduated to become showrooms,” he added.

More supply incoming? Developers are expected to add 4.2 mn sqft of office space by 2028 to alleviate the shortages, according to Knight Frank’s report.

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