{"id":103639,"date":"2025-05-14T00:00:00","date_gmt":"2025-05-14T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/uae\/rents-up-amid-tight-supply-in-dubais-office-market\/"},"modified":"2025-05-14T00:00:00","modified_gmt":"2025-05-14T00:00:00","slug":"rents-up-amid-tight-supply-in-dubais-office-market","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/uae\/2025\/05\/14\/rents-up-amid-tight-supply-in-dubais-office-market\/","title":{"rendered":"Rents up amid tight supply in Dubai\u2019s office market"},"content":{"rendered":"

Dubai\u2019s office market<\/strong> extended its rally in 1Q 2025<\/strong>, with limited supply and strong demand driving record-low vacancy rates and sharp rental increases, according to Savills\u2019 latest Dubai Office Market report (pdf)<\/a>. Rents rose across all 22 sub-markets tracked, with average y-o-y increases reaching 45%.<\/p>\n

(Tap or click the headline above to read this story with all of the links <\/strong>to our background as well as external sources.)<\/p>\n

Prime districts led rental growth: <\/strong>Business Bay saw the steepest increase, with rents surging 94% y-o-y \u2014 putting prices on par with premium Dubai International Financial Center (DIFC) properties. Downtown Dubai followed with a 51% rise, while the DIFC itself recorded a 46% jump. Rents in TECOM clusters, including DIC, DMC, and DKV, were up 23% y-o-y.<\/p>\n

Grade A space remained scarce, fueling more demand in Dubai South, Expo City: <\/strong>The vacancy rate in DIFC dropped to just 2%, with occupancy at 98%. Tenants are beginning to look towards core submarkets like Dubai South and Expo City, where rents are more competitive and space is more readily available, the report said. Rents in Dubai South climbed 54%. <\/p>\n

Lease renewals > relocations: With steep rent increases of 45% y-o-y on average, many tenants opted to renew existing leases, particularly in areas protected by RERA caps, rather than relocate. This trend also contributed to lower market churn and reduced availability for new entrants, Savills noted.<\/p>\n

Flexible workspace providers have also expanded to meet rising demand<\/strong>, with new entrants from Egypt, Asia, and the UK joining the market, while existing providers expanded into malls and semi-industrial zones. <\/p>\n

ICYMI- Demand was buoyed by new business activity: <\/strong>The Dubai Chamber of Commerce recorded 70.5k new business registrations<\/a> in 2024, a 4.6% y-o-y increase. High-growth sectors included construction (+33%), real estate and business services (+8.4%), transport and communications (+8.3%), and financial intermediation (+8.3%). These trends were reflected in leasing activity, with financial services, consulting, and tech and media firms accounting for 51% of Savills\u2019 1Q transactions.<\/p>\n

Looking ahead: <\/strong>Savills expects space constraints and subsequent rental pressure to persist throughout 2025. While new supply is in the pipeline, much of it is already pre-leased, keeping competition for quality space high, the report said.<\/p>\n","protected":false},"excerpt":{"rendered":"

Vacancy in DIFC dropped to just 2%<\/p>\n","protected":false},"author":1,"featured_media":103640,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"newspack_ads_suppress_ads":false,"newspack_popups_has_disabled_popups":false,"newspack_sponsor_sponsorship_scope":"","newspack_sponsor_native_byline_display":"inherit","newspack_sponsor_native_category_display":"inherit","newspack_sponsor_underwriter_style":"inherit","newspack_sponsor_underwriter_placement":"inherit","ep_exclude_from_search":false,"_primary_brand":0,"newspack_featured_image_position":"","newspack_post_subtitle":"","newspack_article_summary_title":"Overview:","newspack_article_summary":"","newspack_hide_updated_date":false,"newspack_show_updated_date":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[1565],"tags":[87,7,98],"brand":[],"newspack_spnsrs_tax":[],"class_list":["post-103639","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-real-estate","tag-dubai","tag-enterpriseam-uae","tag-real-estate","wpautop","entry"],"acf":{"mongo_id":"f4488b34-59be-4401-aa53-0a6955225c73","order":"9","is_powered_by":false,"story_type":"1","photo_url":"https:\/\/ent.news\/2024\/12\/345.jpg","photo_position":"above","homepage_title":"","full_issue_title":"Dubai office rents surged 45% in 1Q as vacancy hit record lows -Savills","related_issue":[103623],"teaser":"Vacancy in DIFC dropped to just 2%","voice_url":"https:\/\/s3.us-east-1.amazonaws.com\/ent.news\/audio\/2025\/5\/.e1a4288f-026e-4f3d-a0e7-65eaba9a1dba.mp3"},"yoast_head":"\nRents up amid tight supply in Dubai\u2019s office market - 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