{"id":106534,"date":"2025-08-14T00:00:00","date_gmt":"2025-08-14T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/uae\/prime-office-demand-surges-in-uae\/"},"modified":"2025-08-14T00:00:00","modified_gmt":"2025-08-14T00:00:00","slug":"prime-office-demand-surges-in-uae","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/uae\/2025\/08\/14\/prime-office-demand-surges-in-uae\/","title":{"rendered":"Prime office demand surges in UAE"},"content":{"rendered":"

Business service firms prompted record demand for offices in 1H<\/strong>, accounting for 38% of demand in Dubai and 32% in Abu Dhabi, according to Knight Frank\u2019s latest Dubai (pdf)<\/a> and Abu Dhabi (pdf)<\/a> office market reviews. Occupancy levels in both emirates remained at record highs, meaning that the supply pipeline is only growing bigger.<\/p>\n

DUBAI-<\/p>\n

Sales activity remained brisk<\/strong>, with 83 office transactions over AED 10 mn recorded in the first half, up from 27 a year earlier. Prime fitted office rents in Dubai\u2019s Dubai International Financial Center (DIFC) averaged AED 400 per sqft in 1H 2025, maintaining its position as the most expensive submarket. <\/p>\n

Downtown retained its spot as the top sales market<\/strong>, with average prices exceeding AED 5k per sqft \u2014 well ahead of Business Bay, where prices have grown at a compound annual growth rate (CAGR) of 21.2% since 2020. Other submarkets, including the Greens (AED 260 per sqft) and Dubai Design District (AED 280 per sqft), also saw robust gains.<\/p>\n

New spaces are getting more expensive as secondary stock cools: <\/strong>While Savills\u2019 2Q data<\/a> pointed to a cooling in parts of the market \u2014 nearly half of the submarkets it tracks saw flat rents \u2014 Knight Frank\u2019s 1H report shows prime districts continuing to post strong gains and attract high-value transactions. The difference underscores a widening gap between top-tier space and secondary stock, where rental growth has begun to ease from the steep jumps seen a year earlier, Knight Frank said. <\/p>\n

Looking ahead:<\/strong> Developers are responding to the tight prime availability with a pipeline set to deliver 15.8 mn sqft by 2030, more than 7 mn sqft of which will be in the DIFC \u2014 largely set to be offered as build-to-rent schemes. Business Bay is leading the build-to-sell segment, with more than 1.3 mn sqft planned. Knight Frank expects demand to stay strong and outpace new premium supply this year, driving further rental growth in prime space and widening the gap with older stock.<\/p>\n

ABU DHABI-<\/p>\n

Demand doubles as Grade A space remains tight: <\/strong>Office requirements in Abu Dhabi totalled more than 50k sqm in 1H 2025, up 110% y-o-y, according to Knight Frank. Grade A occupancy remains near full, while January saw a surge in transactions driven by new rental contracts. <\/p>\n

Rents jumped in several districts in 2Q<\/strong>, led by Musaffah, up 68% q-o-q, followed by Al Bateen, up 64%, and Al Hisn, up 18%. Older stock saw modest declines, with Al Danah down 2% and Al Nahyan down 6%.<\/p>\n

Looking ahead:<\/strong> This year will see around 51k sqm of new office space delivered, while next year could see 43k sqm delivered. Upcoming completions include Aldar\u2019s 22.2k sqm HB Tower in Yas Island and the 12.0k sqm Saas Business Tower on Al Reem Island. A larger wave of supply is expected in 2027, with almost 175k sqm of new office space scheduled.<\/p>\n

REMEMBER- <\/strong>ADGM\u2019s 1Q 2025 expansion to Al Reem Island<\/a> added 500k sqm of premium office inventory to the market. Business activity saw a significant uptick<\/a> on the back of this, with the financial freezone now housing 2.8k operational firms \u2014 a 43% increase from the previous year.<\/p>\n","protected":false},"excerpt":{"rendered":"

Dubai\u2019s pipeline will add 15.8 mn sq ft by 2030, while Abu Dhabi has nearly 175k sqm due by 2027<\/p>\n","protected":false},"author":1,"featured_media":106535,"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":[1360,87,7,98],"brand":[],"newspack_spnsrs_tax":[],"class_list":["post-106534","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-real-estate","tag-abu-dhabi","tag-dubai","tag-enterpriseam-uae","tag-real-estate","wpautop","entry"],"acf":{"mongo_id":"38c23da9-617e-4333-90f7-d7ae0c63aded","order":"6","is_powered_by":false,"story_type":"1","photo_url":"https:\/\/ent.news\/2025\/5\/574.jpg","photo_position":"above","homepage_title":"","full_issue_title":"Dubai and Abu Dhabi office markets see strong 1H demand and growing supply pipelines","related_issue":[106524],"teaser":"Dubai\u2019s pipeline will add 15.8 mn sq ft by 2030, while Abu Dhabi has nearly 175k sqm due by 2027","voice_url":"https:\/\/s3.us-east-1.amazonaws.com\/ent.news\/audio\/2025\/8\/.75072ccc-0d2a-4919-b317-8d68c998444b.mp3"},"yoast_head":"\nPrime office demand surges in UAE - 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